The global PC market will be controlled by a few key players and
Lenovo will continue seeking acquisitions to keep up with the
trend, company chairman Yang Yuanqing has said.
"The PC industry has been consolidating," Yang told China
Daily, elaborating on the company's strategy to stay ahead of
the game.
On August 7, Lenovo, the world's third-largest PC maker after HP
and Dell, announced it had exclusive negotiation rights to buy
Packard Bell, the fifth-largest PC maker in Europe.
Only 20 days later, Acer in Taiwan announced it would pay $710
million to buy PC maker Gateway, the US fourth largest.
With the acquisition, Acer would become the third largest in the
world, overtaking Lenovo - and complicate the latter's bid for
Packard Bell.
Gateway has the first right to buy Packard Bell under an earlier
agreement, and so poses a challenge to Lenovo's plan to buy the
European firm.
"The acquisition of Packard Bell is just one of many of our
options," said Yang. "We never put all our bets on one deal."
He said even if Lenovo fails, the company has a contingency
plan.
While Lenovo and Acer seek acquisitions, the consolidation of
the industry is getting intense.
According to US research house iSuppli, the top five PC makers
gained 9.2 percent of the market share from other competitors in
the second quarter of this year.
Lenovo posted sparkling 23 percent quarter-on-quarter growth,
much higher than HP's 4.4 percent or Dell's 5.6 percent. Acer's
growth declined by 0.2 percent.
Wilson Wan, deputy general manager of US research firm IDC's
China business, said the recent acquisitions have taken the
competition to a higher level and players must try to expand faster
to survive.
"We are always open to mergers and acquisitions, given our
established capability from the integration of IBM's PC business,
but we do not do it blindly," said 43-year-old Yang.
He said Lenovo's efforts to integrate the former IBM business
has proved successful and the next goal is more about expanding
business in all product categories and regions outside China.
Wan also said if Lenovo does not manage to acquire Packard Bell,
it should shift its focus to organic operations.
"I think the next step for Lenovo is to strengthen distribution
channels, which is more critical to succeed in markets outside
China," Wan said.
(China Daily September 13, 2007)
