Lenovo looks to take greater share of China's tablet market

A billboard advertising Lenovo's LePad tablet in Beijing. Lenovo said high demand for the tablet has resulted in a supply shortage since its debut in China in March. Xu Zi / China News Service
The Chinese computer maker Lenovo Group said on Thursday that it aims to grasp 20 percent of China's tablet computer market by the end of this year, and plans to launch a series of new devices in the following months.
That will put the company in direct competition with Apple Inc, which takes up nearly 80 percent of China's tablet market with its popular iPad.
Yang Yuanqing, chief executive officer of the world's fourth-largest PC maker by shipments, told reporters that high demand for the LePad tablet has resulted in a supply shortage since its debut in China in March.
"Although it's only been in the market for a couple of months, the market response for LePad has been very good," said Yang. He said that the company is working on a series of new tablet devices, including a ThinkPad tablet aiming at commercial users, that will be launched in the coming months.
Apple's iPad and iPad 2 took 78.3 percent of the market share in China in the first quarter of this year, distantly followed by Samsung's 5.1 percent and then several small domestic players, according to figures from the research firm Analysys International. The total sales volume of tablet PCs in China is expected to surpass 4.5 million units by 2011, the research firm said.
Yang said on Thursday that he believes that tablet computers will create new consumer demand that will eventually account for 15 to 20 percent of the total PC market.
He said traditional computers, such as desktops and laptops, will continue to see dynamic growth.
Lenovo on Thursday reported a tripled fourth-quarter profit, as strong orders in the corporate customers and emerging markets helped to boost sales. Net income climbed to $42 million in the three months ended March 31, from $13 million a year earlier, the company said.
Sales in China accounted for 46.4 percent, or $10 billion, in 2010, while other emerging markets contributed 17.9 percent to Lenovo's revenue. Sales in the United States, Europe and other mature markets were 35.7 percent, according to the company.
According to figures from the research firm IDC, global shipments of personal computers slipped 3.2 percent in the first quarter of the year, as high commodity prices and the Japanese earthquake increased uncertainties in the market.
The PC growth rate in China, which is set to overtake the United States to become the world's biggest PC market next year, is less than 10 percent in the first quarter of this year, IDC said.
Simon Ye, an analyst from the research firm Gartner, said there is still huge potential for China's PC market, although market growth is slowing due to a larger base. He said the nation's rural market will play a major role in the overall market growth.
Lenovo has aggressively expanded outside China since it became a global brand by acquiring IBM's PC unit in 2005. Last year, the company launched its new smartphone LePhone and is also planning to enter the game-console market.
In January, Lenovo and Japan's NEC Corp agreed to combine their PC businesses in Japan, giving Lenovo wider access to that market.
Liu Chuanzhi, chairman of Lenovo Group, said on Thursday that he thinks the company's acquisition of IBM's PC business can now be labeled a "success".
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