Lenovo struggling to meet global challenge

One year after it famously acquired IBM's PC division, Lenovo is finding that the global PC market is not the most welcoming of environments. The world's third-largest PC-maker faces pressure on its margins as it continues to lose market share to rivals Dell and HP. Its 2006 fiscal year results saw profit plunging to US$22.2 million from $144 million a year earlier. Adding to the gloom was a recent US State Department decision to remove Lenovo PCs from any secure network, because of concerns over Chinese spying. While the US decision has been widely condemned, it points to continuing suspicion over China Inc in that country - despite the heady acclaim one year earlier when Lenovo completed the historic IBM acquisition.

by | 06/14/2006

One year after it famously acquired IBM's PC division, Lenovo is finding that the global PC market is not the most welcoming of environments.

The world's third-largest PC-maker faces pressure on its margins as it continues to lose market share to rivals Dell and HP. Its 2006 fiscal year results saw profit plunging to US$22.2 million from $144 million a year earlier.

Adding to the gloom was a recent US State Department decision to remove Lenovo PCs from any secure network, because of concerns over Chinese spying.

While the US decision has been widely condemned, it points to continuing suspicion over China Inc in that country â€” despite the heady acclaim one year earlier when Lenovo completed the historic IBM acquisition.