Thu, Feb 10, 2011 - Page 10 News List

NEC, Lenovo may extend venture to cover server sales

Bloomberg

NEC Corp is in talks with Lenovo Group Ltd to partner on server sales in China, a move that would extend the joint venture announced last month between the two PC makers.

“There’s a complementary relationship,” Masato Yamamoto, head of NEC’s platform business, said at a briefing in Tokyo yesterday.

An agreement between the two companies on servers would give NEC better access to the Chinese market, while helping expand Lenovo’s product lineup, Yamamoto said, declining to specify when an agreement might be reached.

NEC, Japan’s largest maker of PCs and servers, is seeking to reduce its reliance on the domestic market, which accounts for 84 percent of the company’s sales. A deal would help Lenovo, which is also introducing tablet computers and smartphones, beef up its server business and diversify products.

“The PC market is coming to the end of its growth, and Lenovo is probably looking around to see what else it can build on,” said Takao Hattori, an analyst at Tokyo-based Toward the Infinite World Inc.

“NEC has probably wanted to partner with somebody because they’d have a tough time expanding in China by themselves,” Hattori said.

The two companies agreed on Jan. 27 to form a joint venture to sell PCs in Japan. Lenovo will own 51 percent of the company, which will be formed by merging NEC’s PC business with Lenovo’s assets in the market. The two companies said at the time they might also collaborate on tablet computers and servers.

Lenovo, based in Raleigh, North Carolina, had 10 percent of the world PC market in unit terms during the first nine months of last year, ranking it behind Hewlett Packard Co, Acer Inc (宏碁) and Dell Inc, data from industry researcher IDC showed.

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