Lenovo CEO: we are not afraid of Huawei tapping into the PC market

China’s top smartphone maker Huawei announced that it will march into the PC market with the launch of its first tablet, the 2-in-1 MateBook at the Mobile World Congress 2016. Chinese PC market dominator Lenovo responded that it isn’t worried about the emergence of this new rival.

Huawei's MateBook (Photo from Huawei.com)
Huawei’s MateBook (Photo from Huawei.com)

Lenovo, which held 21.6% of the global PC market in 2015, dominates the global PC market together with HP, Dell, Asus and Apple. According to the research firm IDC, Lenovo completed 15.39 million shipments in the fourth quarter of 2015, making it the global champion of PC sales for 11 consecutive quarters.

Though it remains in the leading position, Lenovo’s PC business faces challenges. The global PC market was sluggish in 2012, and has been in decline since then. Worldwide PC shipments will continue to decline into 2016, predicted IDC. Overshadowed by these gloomy market conditions, 2015 brought declining PC sales and declining revenue for Lenovo, according to its earnings report.

lenovo notebook
Photo from Baidu Images.

In response, Yang Yuanqing, the president and CEO of Lenovo Group, said publicly on Wednesday at the Mobile World Congress that although overall global PC sales had been falling in the past few quarters, the industry will continue to exist because computers are, and will always be, an indispensable tool. Their next step is to go into niche markets by developing customized products for different groups of users, for instance, educational products and games.

Meanwhile, outsiders are entering the PC scene, posing a direct threat. Today’s new kid is Huawei, and Xiaomi will very likely be the next. The CEO of Huawei Consumer Business Group Richard Yu shouted out that Huawei will sooner or later become number one in the PC industry at MWC 2016.

“It is good news to see newcomers joining the PC market, because they will bring more attention to this industry from the public. That’s what we welcome,” Yang told China Business News in an interview in February.

Photo from www.c114.net.
Photo from http://www.c114.net.

In addition to PC sales, 2015 has also been a tough year for Lenovo’s smartphone business. According to third quarter earnings in the 2015 fiscal year, Lenovo’s mobile revenue accounted for 25% of the total. Data from IDC shows that Lenovo’s rank in global smartphone vendors went from third place in 2014 with 7.2% market share, helped by the strength of Motorola, which it acquired that year, to fourth in the fourth quarter of 2015 with 5.1% market share.

Lenovo also suffered a major downturn in the domestic market, as its ranking in top Chinese smartphone vendors dropped to eighth in 2015, according to market research firm Counterpoint Technology.

Yang declared that Lenovo’s strategy in the smartphone sector is to target different markets with different plans. They plan to introduce new innovative products to grab more shares in mature markets including the U.S. while mainly focusing on emerging markets like India and Indonesia.

“Breakthrough in emerging markets will definitely help achieve a turnaround in domestic competition,” said Yang.

AllTechAsia Staff

AllTechAsia is a startup media platform dedicated to providing the hottest news, data service and analysis on the tech and startup scene of Asian markets in English.

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