Business / View

Guess who's the world's top PC maker?

By Tom McGregor (China Daily) Updated: 2012-10-12 17:29

Hewlett Packard stood atop the rankings as world's biggest PC-maker for the past six years. But then along came Lenovo with a bold and innovative strategy to challenge the computer giant.

"Lenovo accounted for 15.7 percent of PC shipments in the third quarter, according to a research firm, Gartner, compared with 15.5 percent for HP," as reported by the Daily Telegraph of London. "the ascent of Lenovo, which bought IBM's PC business a decade ago, shows little sign of slowing. The company is benefiting from strong demand in its domestic market allied to an aggressive pricing strategy."

Numerous other factors accounted for its success. The Chinese PC maker has pursued a strategy to sell its products to emerging markets, open a manufacturing plant in the US and create new devices that appeal to consumers who are growing accustomed to Apple iPads and Samsung Galaxy smart phones. Additionally, Lenovo's takeover of IBM provided the company with American know-how to expand globally.

Moving in on emerging markets and spreading a strong sales network to rural regions of China had been costly and risky, but has eventually boosted its bottom-line. Lenovo had to build from the ground up with manufacturing and distribution channels to ship its computers to isolated areas around the world without guarantees that consumers living there would actually purchase its products.

Well, the numbers speak for themselves. Wang Jiping, a senior analyst from the US-based research company International Data Corp, told Bloomberg that, "Lenovo started selling more of its products in rural areas in China... Lenovo now controls 35 percent of the Chinese PC market."

Meanwhile, Lenovo had won the honor as top PC shipper in India, while it's expanding aggressively in Latin American countries with factories in Brazil and Mexico.

The corporation intends to sell more of its computers in the US, so it can place "Made in USA" stickers on full display. "The company, which is based in China, earlier this month announced it would open a factory to make computers in Whittsett, North Carolina – its first such facility in the future, which could create more jobs," later on.

Politics in the US has become rife with increasing anti-China sentiments as the nation struggles with slow economic growth rates and high unemployment. Many Americans fear a rising China would mean fewer jobs for their fellow citizens. Lenovo can counteract these concerns as a pivotal jobs creator for the US.

The factory would serve another useful purpose by reducing delivery times for shipping its PCs to American consumers within a week or in some instances overnight. "Many Lenovo computer shipments originate from China and are supposed to reach companies in 10 days, but in some cases take weeks," as disclosed by PC World.

Lenovo is calling the "Tar Heels" state of North Carolina its home for US operations, which places it at another advantage over California-based HP. North Carolina enjoys lower taxes, property values, labor costs and less regulations, along with a more friendly business environment than California does.

Nevertheless, HP has already launched a publicity campaign to claim it's still indeed the world's top PC maker. SmartHouse Website reports that, "Hewlett Packard has claimed recent research from Gartner, who had the first time awarded Lenovo the top gong for being the world's top PC shipper is wrong … Gartner's main competitor, the IDC, had HP holding onto the top spot by the thinnest of margins."

Perhaps, HP raises a valid argument, but just temporarily. Lenovo appears poised to surge pass all its rivals soon and remain number one in the rankings for many years ahead, since the company has an effective long-term business plan. But will there be a Chinese PC maker to rival Lenovo any time soon?

The views do not necessarily reflect those of China Daily.

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