“Benefiting from the high-speed market expansion in China, Lenovo has retained its global market shares”, says Yang Yuanqing, chairman of Lenovo Group.

Lenovo’s computer sales in the last quarter of 2006 in the Chinese market increased by 19% over the same period in 2005. The company was able to maintain its industry leading status with 36.2% global market shares. Although the gross profit rate of Lenovo in China is 5.1% which is 0.3% higher than that in American market, this rate is now falling slowly. Therefore, the situation for Lenovo, as a company that relies heavily on domestic sales, may turn worsen in the future.

Industry insiders generally believe that, although the company will require some recovery time, Lenovo’s hardest days have already passed after the acquisition of IBM’s computer branch company. The turnover and the pre-tax profit in the 4^th quarter for Lenovo is not a large increase compared to the last corresponding period. Therefore, the revenue Lenovo was able to secure came as a result of tax-saving initiatives.

Facing two computer giants Dell and HP as competitors in American market, Lenovo’s sale situation doesn’t seem promising in terms of the computer retail market. Despite this, however, Lenovo continues to succeed in India, Hong Kong and Germany, due to its low production costs.   .