by Anton Shilov
09/29/2008 | 09:46 PM
Lenovo Group, one of the world’s top personal computer manufacturers, is ready to acquire one of its smaller rivals to boost its presence on well-developed markets, media reports claim. One of the possible targets for the Chinese PC conglomerate is a stake in Fujitsu Siemens Computers.
<%BANNER[article]%>“Although we remain cautious, it is time for us to take on another challenge. […] We’ve seen valuations go down in this market, which presents us with opportunities to grow either by acquisition or partnership,” chief financial officer Wong Wai Ming said in an interview with South China Morning Post news-paper, reports Reuters news-agency.
After Acer Group acquired Gateway and Packard Bell recently, Lenovo lost its No. 3 spot to its rival. In Q2 2008 Acer commanded 9.4% of the worldwide PC market, whereas Lenovo’s market share was 7.9%, according to Gartner market tracking firm.
Since profit margins on the PC market are very thin, personal computer vendors are competing very seriously for higher market share since this gives them an ability to trim manufacturing and parts costs because of larger volumes.
Fujitsu Siemens Computers (FSC), a joint venture between Fujitsu and Siemens, commands less than 6% of the PC market in EMEA (Europe, Middle-East, Africa) region, according toIDC market tracking firm. In fact, FSC is the 7th largest PC vendor in the region, whereas Lenovo is at No. 6. Given very low profitability on the PC market, Siemens reportedly plans to sell its stake in the company and Lenovo is considered as one of the potential buyers.
Theoretically, Lenovo might be interested in acquiring a stake in Fujitsu Siemens in order to better compete against Acer in Europe. However, given weak positions of FSC, it may make more sense for Lenovo to try strengthening its own brand instead of taking over the smaller rival.