Lenovo Teams With NEC to Fight Apple

DAVOS, Switzerland ( TheStreet) -- Chinese technology giant Lenovo is looking to bolster its tablet strategy against the likes of Apple's ( AAPL) iPad through its new joint venture with multinational IT giant NEC.

Lenovo will hold a 51% stake in the Japanese joint venture, which is intended to boost its presence in Japan's lucrative PC market. The computer maker will also gain access to a bigger design pool for its future tablet offerings, said Rory Read, Lenovo's COO.
Lenovo
Lenovo will use its NEC joint venture to bolster its tablet strategy.

"It gives us access to a broader portfolio of products, including some of the work that is being done around servers and tablets," said Read, in a phone interview with TheStreet. "It's going to impact our broader innovation focus -- what a deal like this does is give us more engineers, more designers."

Lenovo is in the midst of a major tablet push, showing off its new LePad Microsoft ( MSFT) Windows tablet at CES and also demoing its IdeaPad U1 notebook/tablet hybrid. More recently, the firm's IdeaPad U260 notebook has been touted a viable challenger to Apple's MacBook Air.

NEC has also been ramping up its efforts in the tablet space, previewing a dual-screen Android prototype dubbed the Cloud Communicator at CES earlier this month.

"There's a lot of interest around the tablets that we announced at CES," said Read, who was speaking from the World Economic Forum in Davos. "Obviously there's momentum in that space."

Lenovo is currently in fourth place in the global PC market, according to tech research firm IDC, behind market leader Hewlett-Packard ( HPQ), Dell ( DELL) and Acer. The Chinese firm, however, is said to be closing in on Acer, growing its fourth-quarter market share to 10.4% from 8.8% in the same period last year.

Lenovo Chairman Liu Chuanzhi also said this week that his firm's LePad and LePhone offerings will be used to fend off Apple's growing presence in the Chinese market.

"We have an extreme focus on the innovation of LePad and LePhone because these products will dominate the future market," he said in an interview with Bloomberg at Davos. "Anyone who loses this battle will be phased out from the history of this industry."

Apple now has four retail stores in China, and has been enjoying strong demand for its Mac offerings there. The Cupertino, Calif.-based gadget maker has also been selling its iPhone in the country since late 2009. Apple's recent first-quarter revenue from greater China, which includes mainland China, Hong Kong and Taiwan, was $2.6 billion, a four-fold increase from the prior year's quarter.

"Though Apple is winning a significant share in the Chinese market, it has not gained a clear leading position yet," Liu told Bloomberg. "Our advantage is we know this market better."

--Written by James Rogers in New York.

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