Chinese manufacturer could overtake HP, despite slowing sales of PCs
Lenovo PC sales overtook Dell’s in the third quarter of last year to become world number two and currently has a 14.9 percent market share, only 0.6 percent short of HP. If it overhauls HP, it would mark the first time that a Chinese company occupied the top spot in a technology sector.
It was predicted that telecommunications company Huawei would surpass Ericsson’s 2011 sales, but this did not happen due to competition in the handset market and an inability to crack the US.
Rise of China
Analysts have attributed Lenovo’s rise to aggressive pricing, overseas acquisitions and an expanding home market. The manufacturer acquired Medion last year and IBM’s PC business in 2005, with 42 percent of its revenue generated in China.
However they have also warned that this rapid expansion has come at the expense of profit margins and said Lenovo’s fortunes could suffer due to a slowing PC market. Shipments stalled in the second quarter this year as users are delaying their purchases ahead of the October release of Windows 8.
Microsoft has urged users not to wait, offering anyone who buys a Windows 7 computer in the next few months an upgrade to the newest version of its operating system for under £10 when it is finally released.
Lenovo will also take heart from the fact that the release of Windows 8 and the advent of the ultrabook is expected to drive demand for PCs later this year.
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