Apple are pricey and won’t cut it in mainstream China. That’s what its bullish Chinese rival, Lenovo, are saying, coming out fighting against the US giant who beat it on home turf.
“Apple only occupies the high-end market. The high price tag of US$500 will not work in small cities, rural areas or lower-income segment,” a sniffy Yang Yuanqing told Zol.com. this week.
And it will undercut Apple on price, if necessary.
“I’m not saying we’re deliberately pushing down the price but our strategy is to provide more categories of products and to cover the different niche markets.”
And although Apple’s iPad and iPhone hold sway now, this will be short lived, he added, likening Cupertino’s position to IBM’s once held dominance in the PC industry.
The iPad creator’s second-quarter earnings in the Greater China area, which includes Hong Kong and Taiwan, outperformed its ThinkPad rival, hitting $3.8 billion – a billion more than Lenovo.
And that’s gotta hurt, particularly after Lenovo announced stellar financial results just last week, with net profit jumping to $108.8m for Q1, a 98% rise on last year.
But it was not quite enough to outrun Apple’s dreamy market success.
Lenovo China first quarter $2.8bn sales accounted for almost half of global figure (47.9%), and holds No.1 position in the consumer PC market there with 31.7%, so its CEO’s defensive outburst is natural.
But not to worry, as the giant has a strategy: to fight Cupertino, part of its ‘protect and attack’ strategy, as revealed last week.
Lenovo has its eye on smartphone market and looking to give iPhone a run for its money but will stick to its Google’s Android OS, Yang also revealed.
In addition, he yearns to make his company the largest PC manufacturer–not just in China–but in the world.
Rather than being in denial about the strenghtening tab market, Yang believes the growth and diversity potential is astronomical and in future notebooks and tablets will shift away from Apple supremacy and grow together organically.
But it may not have long to wait, particularly with HP’s future in doubt, although he refused to comment about the current situation.
Reporting its first fiscal quarter to June 30, Lenovo grew faster than the top five PC makers, like Dell (No.2) and HP (No.1), pushing it to No.3 spot by shipments, pushing Acer down to No.4, according to analysts IDC.
So, it’s not just Apple that should be watching its back.