Apple Inc may have surpassed Lenovo Group’s (聯想集團) revenue in Greater China for the first time in at least a decade as the US firm’s surge in sales hurt growth at the biggest Chinese computer maker.
Lenovo’s combined revenue in China, Hong Kong and Taiwan last quarter lagged behind the US$3.8 billion for Apple, according to four analysts surveyed by Bloomberg News.
Lenovo, which acquired IBM Corp’s PC business in 2005, this week added two new tablet PCs in the US featuring Google Inc’s Android software to take on Apple in its home turf.
Overtaking Lenovo within two years of introducing the iPhone in China shows the progress Apple chief executive officer Steve Jobs is making in luring buyers in the world’s fastest-growing major economy.
Apple chief operating officer Tim Cook told analysts this week that the company was only “scratching the surface” in the country.
“Apple is doing very well in China,” said Jean-Louis Lafayeedney at JI Asia in Hong Kong.
Apple’s growth may become a concern for Lenovo unless the Chinese company increases sales of its new smartphones and tablet computers soon, said Lafayeedney, who has a “buy” rating on Lenovo.
Lenovo generated US$3 billion in sales from China in the quarter ended June 30, according to Jenny Lai (賴惠娟), head of Taiwan research at HSBC Holdings PLC. She had the highest of the analysts’ estimates in the Bloomberg survey.
All four analysts said Lenovo’s revenue from Hong Kong and Taiwan were not enough to take its total for the Greater China region past that of Apple’s. That would make it the first time Apple posted higher sales than Lenovo in the region since at least 1998, when the Chinese company acquired parent Legend Group’s PC business.
Expansion into China and other emerging markets helped make up for slower growth in the US. Sales in China, Taiwan and Hong Kong totaled US$8.8 billion in the first three quarters of the fiscal year, Apple said.
“China was very key to our results,” Cook said on Tuesday. “This has been a substantial opportunity for Apple, and I firmly believe that we’re just scratching the surface right now.”
For Lenovo, Apple’s rising popularity means increasing competition in China, where its brand adorns every PC out of three.
The introduction of tablet computers by competitors weakened growth in China’s PC market, Lenovo chief executive officer Yang Yuanqing (楊元慶) said in February. Apple started selling its iPad tablet in China in September last year.
“We do not comment on the business results of other companies,” Lenovo said in an e-mail. “Our results in China have been strong. Lenovo is the number one PC company in China with more than 30 percent market share — more than 3 times our nearest competitor.”
“The iPad has eroded sales at not only Lenovo, but all local computer makers,” Lai said.
Lenovo will start selling two tablet computers based on Android technology in the US in the coming month, and add another device powered by Microsoft Corp’s Windows 7 in the fourth quarter. It started selling its LePad tablet in its home market in March.
“Our products will be competitive,” Yang said yesterday in Hong Kong, where Lenovo held a shareholders’ meeting, noting the new tablet devices were priced lower than similar Apple products.
“Lenovo is playing catch-up in the tablet and smartphone market, and it’s going to be difficult for them,” said Vincent Chen (陳豊丰) at Yuanta Securities Co (元大證券) in Taipei. “Apple is such a strong brand that it’s hard to see any one single company that could compete against them.”
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