Trading Markets | January 24, 2011
BEIJING, Jan 24, 2011 (SinoCast Daily Business Beat via COMTEX) —
Lenovo Group Limited (SEHK: 0992) is eyeing the lucrative Japanese market through an investment deal. Two days ago, local media said by quoting the words of an insider of NEC Corporation that the company is holding negotiation with Lenovo to sell the majority stake of its PC subsidiary to the Chinese company. The negotiation is in its final stage.
NEC points out that it has not made any decision relating to an equity sale and the spokesperson of Lenovo announces that the company will make no comments on rampant talks. On the day when the news was reported, the stock price of Lenovo remained stable.
However, the spokesperson of Lenovo reiterates that the company will not miss any opportunity to boost its value. Earlier, Lenovo CEO Yang Yuanqing revealed that the company would kick off cooperation with potential partners, since it has accumulated experience in mergers and acquisitions in buying PC business from IBM.
In 2008, Lenovo was said to acquire Brazilian PC brand Positivo Informatica. In 2009, it was reported to talk with Fujitsu Siemens Computers. Yang then responded that the company had no specific acquisition target, but was looking for such opportunities.
NEC was a veteran PC maker. In 1970s, it launched PC products. Before 2010, the company has gotten operating revenues of JPY 250 billion from PC manufacturing, equivalent to CNY 20 billion. In its homeland, NEC takes a 12% market share.
Actually, the Japanese market has very high threshold. Preventing the foray of foreign brands, the country’s homegrown PC makers survive from severe competition. Currently, at least six PC brands exist in Japan, including Toshiba, Sony, Sharp, NEC, Fujitsu and Panasonic.
Outside Japan, they are unable to compete with PC giants like Hewlett-Packard and Dell Inc. (Nasdaq: DELL) and even defeated by their Chinese peers such as Lenovo, Acer and ASUSTeK Computer. For example, Toshiba has the highest ranking around the world among Japanese brands. However, it is still behind ASUSTeK.
The report of IDC shows that Lenovo took a 20.2% market share in the Asia Pacific Region in 2010. Although the figure was only less than 1% for NEC, the company took 12% of the Japanese market and will improve the competitiveness of Lenovo if it is merged into the latter.
Since 2009, both foreign PC giants and Chinese homegrown brands have shifted their focus to providing PC service. However, they have not given up the traditional PC market. On January 18, 2011, Lenovo announced the establishment of a new business group, mobile Internet and digital home business (MIDH), which was parallel to its traditional PC business.
(USD 1 = CNY 6.58; USD 1 = JPY 82.70)
Source: www.yicai.com (January 24, 2011)
News Release via Trading Markets
