Lenovo?s rise to the top of the PC tree is not surprising, but the pace at which it is doing so is. IDC data released this month shows that the Chinese PC maker?s market share rose to 15.3% globally, which is just 0.4% below that of HP. As we know Lenovo has been especially aggressive with its acquisitions, bagging Brazilian electronics player CCE in 2012, Medion of Germany in 2011 and famously the IBM?s PC division way back in 2005. Such hot inorganic pursuit seems to be delivering the goods for it. Last quarter Lenovo recorded a 90% rise in net profit, though growth in the PC market slowed with consumers moving to mobile web surfing on smartphones and tablets. The way the firm has aggressively appointed a winning set of distributors across the world, especially in emerging markets like Brazil, seems to have done the trick.
The firm has said it will further focus on investments on the high growth tablet and smartphone areas, which in any case is the right thing to do and very much the future. Back in India, Lenovo announced the appointment of Sudhin Mathur as its new director (smartphones). A Lenovo statement last week said that Mathur?s claim to fame was setting up and launching the Sony Ericsson brand in India. Later he became the business head of LG Mobile. This is in line with what the company believes in and with smartphones and tablets driving the sales engine, Lenovo does not want to miss out on any shift in scene. In China, it is the second biggest smartphone and tablet player, though it entered the smartphone market a tad late.
A look at its sales in North America shows a 13% rise, which is remarkable considering it has always been a weak market for the Chinese firm. North America now contributes 15% of its global revenues. It still has plenty of cash to burn. While it is reported to have a debt of $423 million, its locker still has $4.5 billion in cash. Do not be surprised if it goes for further shopping.
Still, the industry is still a tightly contested one, with HP and Lenovo going neck-to-neck at the top. Dell is third with a 11.8% share of the market. While HP?s share dropped from last year, Lenovo moved up by 4%. Analysts believe that Lenovo may not be able to sustain its bull run, if the industry continues to remain sluggish. As per IDC data, global shipments fell 13.9% year on year in the first quarter of this year. IDC stated that this was the steepest fall since it began its watch on the industry way back in 1994. Both Gartner and IDC attributed at least part of the decline of the industry to Windows 8, which they say failed to ignite the market.
It?s difficult to ignore the rise of smartphones when one talks about PCs. The IDC report for Q1 2013, reveals that smartphones have outshipped feature phones for the first time in history. The total number of smartphones shipped in Q1 for 2013 is 50% more than the total number of phones shipped during the period. Here too there is a Chinese charge.
Notes Ramon Llamas of IDC, ?The other major trend in the industry is the emergence of Chinese companies among the leading smartphone vendors. A year ago, it was common to see previous market leaders Nokia, BlackBerry (then Research In Motion), and HTC among the top five. While those companies have been in various stages of transformation since, Chinese vendors, including Huawei and ZTE as well as Coolpad and Lenovo, have made significant strides to capture
new users with their respective Android smartphones.?
India too has shown a significant rise in the mobile segment. A report by IDC?s Asia Pacific quarterly mobile phone tracker for calendar year (CY) 2012 reveals that the overall mobile phone market in India has reached approximately 218 million units. There has been a 16% year-on-year growth compared to 2011. The smartphone market in India grew from around 11 million units in 2011 to 16.3 million units in 2012.