Lenovo hopes to win European users with Packard Bell

Lenovo hopes to strengthen its position among European consumers by acquiring Packard Bell, a top executive said.

The world's third largest PC vendor hopes to strengthen its position among European consumers by acquiring Packard Bell BV, a top executive said Wednesday.

Lenovo pursued a similar strategy when it agreed to buy IBM's PC division in 2004, beefing up its market presence in the U.S. through the acquisition. The Chinese company burst onto the world stage at the time, and has spent the past few years pulling together two very different corporate cultures, Lenovo's and IBM's, into a single global presence. Lenovo's interest in buying Packard Bell shows a readiness to increase its size further by buying rivals.

Packard Bell is strong where Lenovo is weak, among European consumers, said Deepak Advani, senior vice president and chief marketing officer at Lenovo, at the sidelines of a briefing in Beijing.

Lenovo's tie-up with IBM's PC division was a great example of two companies with different strengths forming a solid union, he said. At the time of the purchase, Lenovo was strong among consumers in China, while IBM PCs were favored by enterprise users in the U.S. The deal put the companies in a position to benefit from each other's expertise geographically and in different market segments.

Lenovo is already strong among enterprise users in Europe thanks to the IBM purchase, Advani said, but weaker with consumers. Greater China, which includes China, Hong Kong and Taiwan, represented 39 percent of Lenovo's revenue during its fiscal first quarter, while the U.S. was 29 percent and Europe, the Middle East and Africa trailed at 20 percent, according to a report by Henry King, director of Asia-Pacific investment research at Goldman Sachs (Asia) LLC.

The company's talks with Packard Bell show it's serious about gaining market share in Europe and knocking Taiwanese rival Acer from its perch, he added. Acer derived over half of its revenue from Europe in 2006, and the region is dominated by Acer, Dell and Hewlett-Packard, he said.

Advani said the deal has more to do with Lenovo executing its strategy, and not with Acer.

Despite the advantages to a Packard Bell purchase, King warned that it seemed a bit early for Lenovo to begin seeking another acquisition after just emerging from the challenges surrounding its consolidation with IBM's PC division. The company announced a 13-fold surge in quarterly profits for its first quarter, which ended in June, due to cost cutting and strong PC demand.

"We are concerned that another acquisition this soon may slow its near-term momentum," he wrote.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Dan Nystedt

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?