March 28, 2011 3:18 pm
When Lenovo, the world’s fourth-largest PC vendor, launched its tablet computer on Monday night, the world was not invited.
The company treated Chinese media to a lavish party in Shanghai, and the LePad – a device with a 10.1-inch screen powered by a Qualcomm Snapdragon processor – went on sale in China only. And yet, some industry experts see the Chinese company, under Yang Yuanqing, chief executive, as the most likely future rival for Apple in the global tablet market.
Manish Nigam, head of Asia technology research at Credit Suisse, said Lenovo might be the best positioned among the new tablet vendors because of its dominant position in China. The company has a 30 per cent share in the world’s second-largest and fastest-growing PC market.
“Lenovo is well-placed to make its tablet work. They have been a good engineering company,” said Mr Nigam. “Acer relies too much on [outsourced design and manufacturing], and Asus lacks global scale.”
According to IDC, the technology research company, 18m tablet devices were sold worldwide last year, with Apple accounting for 83 per cent. This year, most forecasts expect the market to more than double to at least 40m units.
Kirk Yang, head of non-Japan Asian hardware technology research at Barclays Capital, said he expected Apple’s market share to slide to about 72 per cent this year and named Lenovo, Samsung, RIM and Acer as strong candidates for grabbing at least 10 per cent each of the remaining market.
|Motorola (Xoom)||Feb 2011|
|Apple (iPad 2)||Mar 2011|
|Acer (Iconia)||Apr 2011|
|Huawei (Ideos)||Apr 2011|
|RIM (PlayBook)||Apr 2011|
|Samsung (Galaxy S2)||Apr 2011|
|LG (Optimus)||Apr 2011|
|HP (TouchPad)||Jun 2011|
|ZTE (v11)||Mid 2011|
|HTC (Flyer)||Q2 2011|
|Source: FT research||* Future dates are estimates and could differ by region|
Lenovo’s focus on China, which will make it a late-comer in other markets, is expected to be the group’s biggest strength. “When it comes to tablets, what matters is software, not hardware,” said Mr Yang. “Lenovo’s strength is that they have a Chinese interface and Chinese applications.”
This follows Lenovo’s successful start in the mobile products segment with the LePhone, which sells well to Chinese consumers who are affluent enough to afford a smartphone but do not read English and want a wide range of homegrown applications.
At Rmb3,499 ($532), the LePad is more expensive than the cheapest iPad, which is available from Rmb2,888 in China. But many Chinese consumers are more likely to compare Lenovo’s tablet with the iPad 2. Apple’s latest product has not officially started selling in China, but grey market imports are available from Rmb5,000.
Analysts also believe that Lenovo’s strategy of launching its mobile products in China first gives the company a valuable testing ground. LG, the South Korean technology group, failed with this strategy for its handset business, but observers expect it to work for Lenovo because the Chinese market is so much bigger than Korea.
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