Strong results, aggressive market advances and competitors' misfortunes have prompted analysts to estimate that Chinese computer manufacturer Lenovo will take the seat of global PC market leader from HP next year. The company is currently some four or five percent behind.
Chinese computer market is the biggest in the world and Lenovo’s 30 percent share there is a significant advantage at home. In fact, the market made up for 42 percent of group revenue, with Lenovo leaving the likes of Acer, Dell, Asus and HP in the dust.
The company sold 2.5 million PCs in China from January to March 2012. Lenovo’s Chairman and CEO Yang Yuanqing said that the company had a 59 percent increase in quarterly net profit and reported strong growth in smaller cities in China, so future seems bright as well.
The competition, namely Dell and HP, haven’t had the best of times as of late and seem to have made headlines for all the wrong reasons. Both HP and Dell reported sharp quarterly profit drops, with HP even cutting 27,000 jobs.
In order to advance on the market, Lenovo had to rely on volume sales. This resulted in Lenovo being the top vendor in emerging markets such as Russia and India but reporting operating losses.
Yang said that the company will find ways to profit in these markets once the company gets to certain volume or 10 percent market share. Apparently, getting customers now means profit later when it’s time to upgrade, especially in the case of corporate businesses.