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!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
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

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

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?