Lenovo is progressing towards replacing Hewlett-Packard as the world’s largest PC maker. Lenovo is inching closer to a global tech title. It will be the first Chinese company to reach the top slot worldwide in the technology sector.
Lenovo started as a ThinkPad maker and its rapid emergence reflects on the advances that the Chinese technological companies have made on the world scene in the past few years. This has happened on account of aggressive pricing and also because of how they have taken advantage of a rapidly rising domestic market.
The rapid growth of Lenovo as far as the market share is concerned has come about at the cost of profit margins. Whatever the case may be, Lenovo is likely to become the leading PC maker in a matter of few months.
Lenovo may face pressure later because of the stiff competition in the tablet sector and a weakening PC market in the future. Lenovo had a fifteen per cent global market share in the last quarter. It is behind Hewlett-Packard by half a per cent margin.
There are various factors that point to the rapid rise of Lenovo. Its volumes have become stronger since its purchase of Germany’s Medion. It has acquired IBM’s PC business almost seven years ago. It also has a joint venture with Japan’s NEC since last year. Investors have sent Lenovo’s stock up by around sixteen per cent this year while the stocks of rivals like Hewlett-Packard, Dell and Acer have dropped.
China makes up for about forty per cent of Lenovo’s total revenue with bulk PC sales. Overall PC demand is likely to pick up later this year with the launching of Windows 8 but the advantage may get diluted as the competition may heat up because the operating system is also designed to run on tablets and laptops.