Apple poised to surpass Lenovo in China on iPhone boost

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Just one year after Lenovo Chairman Liu Chuanzhi said Apple CEO Steve Jobs "doesn't care about China," Apple is set to overtake its rival on its home turf.

"We are lucky that Steve Jobs has such a bad temper and doesn't care about China," Liu reportedly said last year. "If Apple were to spend the same effort on the Chinese consumer as we do, we would be in trouble."

It appears Lenovo's luck has run out, as Apple has, by its own admission, brought its focus to bear on China and seen impressive results: six-fold revenue growth in the region year over year.

Bloomberg spoke to four analysts who each agreed that Apple's $3.8 billion in revenues in Greater China during the June quarter will easily beat Lenovo's for the same period.

Among those surveyed by the publication, an estimate of $3 billion in sales in mainland China was the highest of the projections. Even using the highest estimate, analysts said, adding in the revenues from Hong Kong and Taiwan would not be enough for Lenovo to stay ahead of its competitor.

The Beijing and North Carolina-based company, which purchased IBM's ThinkPad personal computing business in 2005, is due to report earnings next month. During the March quarter, Lenovo made $2.2 billion in consolidated sales in China, which likely doesn't count Hong Kong or Taiwan, and $4.88 billion in total consolidated sales.

Lenovo responded to the report by saying, “Our results in China have been strong. Lenovo is the number one PC company in China with more than 30 percent market share — more than 3 times our nearest competitor.” While Lenovo's PC market share in China will likely remain ahead of Apple for some time, it's the iPhone that has driven the majority of growth for the company.

Asia/Pacific was Apple's fastest growing region in the June quarter, almost quadrupling year-over-year. Meanwhile, Lenovo's LePhone, which is designed specifically for Chinese consumers, hasn't seen the same kind of growth. The company's mobile division achieved just $187 million in sales last quarter.

Apple has also seen success in China with its iPad 2, which drew sell-out crowds when it launched there in May. Earlier this week, Lenovo launched three new tablets: the $499 IdeaPad Tablet K1 for consumers; the $479 ThinkPad tablet for business users; and the IdeaPad Tablet P1 for home and office use, which is coming in the fourth quarter of this year.

Lenovo tablet

For its part, Apple has said it is just "scratching the surface" of the Chinese market, with the iPhone available on just one of China's three carriers. Additionally, Apple has just four retail stores in China, though the locations are the best-performing of the company's brick-and-mortar outlets. The company's retail successes have even spawned

">fake Apple Stores

with staff claiming to work for Apple.


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