August 21, 2011 2:59 pm

Lenovo chief lays down Apple challenge

Lenovo, the Chinese PC-maker, is looking to challenge Apple’s dominance of the tablet computer market with a family of devices designed to appeal to a broader audience than Apple’s single iPad model.

“We will be one of the strongest of the players in this area,” says Yang Yuanquing, chief executive of Lenovo, which has overtaken Acer to become the world’s third largest PC manufacturer by shipment volume.

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Paul Taylor

Mr Yang’s comments come as it emerged this week that Apple’s sales in greater China had overtaken those of Lenovo which reported that its China sales for the latest quarter rose 23.4 per cent from a year ago to $2.8bn. Apple, meanwhile, reported that its second-quarter sales in greater China, which includes Hong Kong and Taiwan, rose sixfold from a year ago to $3.8bn

Lenovo recently launched three tablet PCs including models based on Google’s Android and Microsoft’s Windows operating systems. Mr Yang said Lenovo’s strategy would be to offer models for every market segment including low-priced tablets designed for less affluent consumers in China and elsewhere.

“Apple only covers the top tier,” he says. “With a $500 price you cannot go to the small cities, townships, low salary class, low income class. I don’t want to say we want to significantly lower the price, rather our strategy is to provide more categories, to cover different market segments.”

While he acknowledges Apple’s current domination of the tablet PC market – the iPad has an estimated 70 percent or greater share of most geographic markets – he expected this to change. “Apple is very strong, but when IBM created the PC market there was just IBM, if you look at the PC industry now it is very diversified. I believe that will happen in tablets as well.”

Mr Yang says that he is not worried about sales of PC tablets cannibalising its laptop sales – including sales of the corporate favourite, the ThinkPad. “We definitely cannot ignore the market (for tablets),” he says, “I believe there is cannibalisation there, but I believe both sides will continue to grow. “

Lenovo aims to compete with Apple in the smartphone market, using products built around Google’s Android operating system. ”We have a smartphone in the same price band as the Apple (iPhone) but we also just released a $150 Android-based handset aimed at those with lower incomes. We think we can achieve more volume with that product.”

On top of this, Lenovo has also set its sights on becoming the largest PC maker in the world. Mr Yang says this is “definitely achievable” though he is cautious about how quickly Lenovo can overtake Dell and Hewlett-Packard, the current market leaders.

Last week however, HP revealed that it was considering selling or spinning off its PC business. So would Lenovo be interested in buying that business if it came up for sale? "Lenovo has tremendous momentum in the PC space,” says Mr Yang. “While we won’t comment on rumour or speculation, or on specific strategic decisions by our competitors, our PC business is strong.

“Lenovo firmly believes there is plenty of room for profitable growth, innovation and long-term success in the PC industry if you have the right strategy, great products and strong global execution.”

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