Hong Kong: Lenovo Group is seeking acquisitions to claim the world's third-largest PC seller ranking lost to Acer last year, Chairman Yang Yuanqing said.
"We are not satisfied with our current market share and global ranking," Yang said in an interview with Bloomberg Television. "I believe there will be further consolidation in the industry and we hope to seize the opportunity" to buy, he said.
Lenovo, the Chinese company that shot to prominence with the 2005 purchase of IBM's PC unit, had its European expansion plans foiled last year when Acer bought Packard Bell. Computer makers such as Fujitsu Siemens Computers may be a target for Lenovo, said Joseph Ho, a Daiwa Institute of Research analyst.
"It makes sense for Lenovo to want to acquire as it has the financial muscle," said Ho, who rates Lenovo "outperform". "The question is what to acquire and at what price."
Lenovo had cash and equivalents of $2.2 billion as of December 31, according to the latest information from the company, which gets more than half of sales from Asia.
The $1.25 billion purchase of the IBM business three years ago made the company the world's third-largest computer maker. Lenovo, which moved its headquarters to Raleigh, North Carolina, after the acquisition, lost the position to Acer in the second half of 2007, after the Taipei-based rival bought Packard Bell.
Yang ruled out acquiring Acer and declined to identify target companies.
Ralf Lanzrath, a spokes-man for Maarssen, Netherlands-based Fujitsu Siemens, could not be reached on his office phone after working hours.
Share Value
Lenovo's market value was HK$55.3 billion ($7.1 billion) at the close of trading on April 30, about six per cent of the size of industry leader Hewlett-Packard, according to data compiled by Bloomberg. Acer's value was NT$158.8 billion, or $5.2 billion.
Shares of Lenovo have more than doubled since the IBM purchase, outperforming the MSCI AC Asia Pacific Information Technology Index, which climbed 38 per cent.
During the first quarter, Lenovo shipped 21 per cent more PCs than a year earlier on demand in Asia, researcher IDC said on April 16. That trails Acer, whose 66 per cent growth is the fastest among the top four PC makers.
Lenovo is also fighting to stem market-share losses in the nation to companies including Hewlett-Packard and Dell, which are expanding their distribution networks.
The US makers are introducing low-cost PCs, contributing to a decline in Lenovo's China market share to 29 per cent as of December 31, from 36 per cent a year earlier.
Lenovo won't adopt that strategy to expand outside China, Yang said in the interview in Beijing April 25.
"Because of our Chinese heritage, it's easy for people to think we make low-price and low-quality products," Yang said.
"We want to be known for innovative and high-quality products and if we enter the low-end PC market aggressively now, it will damage our image."
