Lenovo Plans To Double Its Server Market Share In Three Years

Max 'Beast from the East' Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope. If you find him looking lost on the streets of London, feed him coffee and sugar.

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The Chinese company will use proceeds from PC sales to diversify its business

Lenovo, the second largest PC vendor in the world, has set its sights on the server market and plans to double its market share through acquisitions, according to CEO Yang Yuanqing.

Earlier this week, the Chinese company confirmed it was discussing a smartphone joint-venture, possibly involving acquisition of NEC or Blackberry.

According to Bloomberg, Lenovo has already started looking for partnerships in the servers and storage space.

High roller

Last month, Lenovo reported record annual pre-tax income of $801 million (£530m), record annual sales of $34 billion (£22.5bn), record PC shipments of 52.4 million units and claimed a record global PC market share position of 15.5 percent.

Data centre, servers © Sashkin Shutterstock 2012The company achieved all this despite the fact that global PC shipments fell about 14 percent, as consumers are switching to tablets and smartphones. Lenovo was the only major PC vendor that actually grew its market share in the first quarter of the year.

Now, the company wants to boost its server market share, from 2.6 percent to between five and ten percent over the next three years. Acquisitions would help to achieve this level of growth in a short space of time, said Yuanqing at the Fortune Global Forum in Chengdu, China on Thursday.

He also said he believed that Lenovo smartphones, such as the recently announced K900, are capable of performing well in the Western markets.

In 2012, Lenovo signed a partnership with EMC to sell its storage equipment. And earlier this year, the company attempted to buy IBM’s commodity System x86 server business, but the two parties failed to agree on the price.

With cash reserves of more than $3 billion (1.93bn), Lenovo is able to pursue an acquisition of almost any size to expand in new business areas, as the uncertainty in the PC market grows.

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