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Nov. 7 (NBD) -- Lenovo Group has regained the No. 1 spot in the global PC market by market share after the acquisition of Fujitsu's PC business early this month.

According to data from IDC released in early May, Lenovo lost its market leadership to Hewlett-Packard (HP) in the first quarter of this year. The Chinese PC maker held 20.4 percent share while its rival gained 21.8 percent in the period.  

Last Thursday, Lenovo announced that it will purchase a 51% stake in Fujitsu Client Computing Limited (FCCL), which was a wholly-owned subsidiary of Fujitsu. In 2016, Fujitsu owned a share of 4% in the global PC market.

Creating a joint venture with Fujitsu is a part of the strategy of Liu Jun, Lenovo's Executive Vice President and President of the China geography, who is seeking to maintain the company's global dominance.

At present, Lenovo is focusing on increasing profits, rather than shipments. The company gave up some orders with low value in order to improve profit margins.

But the company is not able to keep balance between market share and profits. According to its financial report for the second quarter of 2018 ended September 30, 2017, it saw its consolidated revenue rise 2 percent year on year to 21.773 billion U.S. dollars and reported a net profit of 67 million U.S. dollars. The earnings before interest and tax (EBIT) of Group's PC and intelligent device business fell 15% year on year to 659 million U.S. dollars. 

In addition to the unsatisfactory profits, Lenovo's market share is lackluster as compared to HP's.

IDC's data shows that Lenovo accounted for 21.6 percent market share in the first quarter of 2017, 20.50 percent in the second, and 20.40 percent in the third, while HP took up 22.8 percent in the first and second quarter of this year, respectively, and 21.8 percent in the third. And the year-on-year growth rates of Lenovo were far lower than those of HP in the period.

Since Liu returned to Lenovo in May this year, he shoulders the mission of saving the Group's global PC business.

An industry insider told NBD that under the current market conditions, emphasizing only on high profits won't help Lenovo cope with fierce competition and grab greater market share. But giving up the pursuit of profits isn't an option for the company as it finally turned loss into gain in the first quarter of 2017. In this case, it would be a great challenge for Liu to keep a balance between profits and market shares.

Moreover, how to add value to PCs through innovative elements like artificial intelligence is also a big challenge, the insider added. 

Email: zhanglingxiao@nbd.com.cn