Lenovo, the world's fourth-largest PC maker, is in talks to create a joint venture with NEC that would enable both businesses to better compete globally, according to published reports.
after becoming a player on the global PC scene by buying IBM's personal
computer business, Lenovo reportedly is in talks with NEC about a joint venture
of sorts around their PC units, according to reports.
unnamed source, the Wall Street
Jan. 21 that the two companies are looking at an alliance
that would help both grow their presence in the worldwide PC market. The source
did not say what type of tie-up Lenovo and NEC were discussing, but other
reports say the joint venture would involve Lenovo
acquiring a majority stake
in NEC's PC business, NEC Personal Products
Ltd., a wholly owned subsidiary.
are based on a story in Japan's Nikkei newspaper. A Lenovo spokesperson
declined to comment on the speculation.
Such a joint
venture would marry the world's fourth-largest PC vendor-Lenovo-with a company
that, while fading from the global PC scene, still is the top computer seller
traditional PC market is under pressure because of slowing consumer spending
and a growing cadre of ultra-mobile devices, including tablets and smartphones.
However, it's still a substantial market, and analysts say that enterprise
purchases are making up for some of the consumer drop-off.
research firm IDC estimated that PC shipments in 2010 grew 14 percent, to 346
million units, and executives at both Intel and Advanced Micro Devices are
predicting that the market will grow at least 10 percent or more in 2011.
is the top global PC vendor
, with about a 17.9 percent market share in
shipments in 2010, according to Gartner. Depending on which research firm you
read, either Dell or Acer took the second slot, with the other coming in third.
Ranking fourth in both the IDC and Gartner numbers was Lenovo, with 9 percent to
10 percent of the market.
Toshiba is No.
5, and reports have NEC in about twelfth place. Combining their efforts could
benefit both Lenovo and NEC in a number of ways. For Lenovo, it would mean more
weapons in its arsenal as it tries to chip away at the leads that HP, Dell and
Acer have accumulated. Right now, both Dell and Acer have market shares of 12 percent
to 13 percent.
It also will
give Lenovo, which is based in China, greater traction in the Japanese market,
where NEC reportedly is the top vendor with more than 18 percent of the market.
NEC would be hitching its wagon to the top Asian PC vendor outside of Japan and
help it grow in the rapidly expanding Chinese market.
IDC, Lenovo was by far the top Asian PC vendor (outside of Japan), with 20.2
percent of the market based on units shipped, a significant jump over its 18.2
percent market share in 2009.
second is HP, with 11.8 percent, followed by Dell, Acer and Asus, according to
IDC. However, both HP and Dell are spending millions of dollars in hopes of
opening inroads into the Chinese market.
analysts have said, the PC market is about more than just competition among the
players. Other devices, particularly tablets, are beginning to factor into the
picture, even as consumer spending on PCs slows.
in a Jan. 18 report said the worldwide media tablet market-fueled primarily by
the success of Apple's iPad tablet-grew 45 percent from the second to third
quarter in 2010.
All that will
have an impact on the larger PC market, according to IDC analyst David Daoud.
market was expected to shrink year over year, given the exploding growth
experienced in the fourth quarter of 2009," Daoud said in a statement Jan. 12
when IDC announced 2010 PC market numbers. "Growth steadily slowed throughout
2010 as weakening demand and competition from the Apple iPad constrained PC
shipments. In addition to relatively high market penetration and a 'good-enough'
computing experience with existing PCs, consumers are being more cautious with
their purchases, and competing devices have been vying for consumer dollars.
This situation is likely to persist in 2011, if not worsen, as a wave of media
tablets could put a dent in the traditional PC market."