Lenovo, NEC eye JV to close gap with rivals
By Kentaro Hamada |
January 22, 2011, Saturday
|
Print Edition
Print Edition
CHINA'S Lenovo Group is in talks with Japan's NEC Corp for a joint venture in personal computers, two sources familiar with the matter said, in a deal that would help them close the gap with larger global rivals.
The Nikkei business daily yesterday said Lenovo planned to take a controlling interest in NEC's PC unit, but a buyout might be a delicate move as Japan eyes China's growing clout. Sources said it was not clear what form the partnership might eventually take.
Lenovo, ranked fourth in the global PC market behind Hewlett-Packard, Dell Inc and Acer Inc, is looking to tap NEC's technology for development and expand its share of the Japanese market, the Nikkei said.
NEC, which is the top maker in Japan's mature PC market but does not rank in the top 10 globally, would likely see the tie-up as a chance to take advantage of the fast-growing Chinese market .
The Japanese company clocked sales of about 250 billion yen (US$3 billion) from the PC business last year, accounting for roughly 7 percent of its revenues, the Nikkei said. NEC expected the PC business to be profitable for the year to March.
"Demand for PCs is weakening with the advent of smartphones and tablets," said Tomomi Yamashita, fund manager at Shinkin Asset Management. "As they seek a survival strategy, it is positive that they are looking to a growth area like Asia, rather than choosing a domestic partner."
If the deal goes ahead, it would add to a growing trend of Chinese companies investing in Japan, despite the strong yen. In 2010, according to Thomson Reuters data, acquisitions by Chinese firms in Japan totaled 11.8 billion yen, 6 percent more than in 2009 and 52 times more than in 2008.
NEC had 18 percent of the Japanese PC market in 2009.
The Nikkei business daily yesterday said Lenovo planned to take a controlling interest in NEC's PC unit, but a buyout might be a delicate move as Japan eyes China's growing clout. Sources said it was not clear what form the partnership might eventually take.
Lenovo, ranked fourth in the global PC market behind Hewlett-Packard, Dell Inc and Acer Inc, is looking to tap NEC's technology for development and expand its share of the Japanese market, the Nikkei said.
NEC, which is the top maker in Japan's mature PC market but does not rank in the top 10 globally, would likely see the tie-up as a chance to take advantage of the fast-growing Chinese market .
The Japanese company clocked sales of about 250 billion yen (US$3 billion) from the PC business last year, accounting for roughly 7 percent of its revenues, the Nikkei said. NEC expected the PC business to be profitable for the year to March.
"Demand for PCs is weakening with the advent of smartphones and tablets," said Tomomi Yamashita, fund manager at Shinkin Asset Management. "As they seek a survival strategy, it is positive that they are looking to a growth area like Asia, rather than choosing a domestic partner."
If the deal goes ahead, it would add to a growing trend of Chinese companies investing in Japan, despite the strong yen. In 2010, according to Thomson Reuters data, acquisitions by Chinese firms in Japan totaled 11.8 billion yen, 6 percent more than in 2009 and 52 times more than in 2008.
NEC had 18 percent of the Japanese PC market in 2009.
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