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Lenovo and NEC to tie up PC businesses?

by Pete Mason on 21 January 2011, 12:03

Tags: Lenovo, NEC (FRA:NEC1)

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The personal computer business is a tough game, with most of the market being dominated by heavy hitters HP, Dell and Acer. Although Lenovo - the current global number four - has been making huge strides in expanding its share of the pie, it still has quite a way to go to catch the top three.

According to the Nikkei business daily (via Reuters), though, the Chinese company may be in the final stages of a joint venture with NEC that will help it to further expand its business. Although the Japanese electronics manufacturer isn't well known for its PCs in this part of the world, it is said to hold around 18 per cent of its domestic market.

The agreement would see Lenovo taking a majority shareholding in NEC Personal Products Ltd, the wholly owned subsidiary responsible for NEC's PCs. This would allow the two companies to pool their resources and benefit from the economies of scale associated with a larger operation. It's reported that the NEC brand would remain in use, at least for the foreseeable future.

An NEC spokesman later dismissed the rumours, noting that "what's been reported in the Nikkei did not come from us". However, the rep refused to openly deny the suggestion of a joint venture agreement.

Even though NEC's global market share stands at less than one per cent, the deal could still give Lenovo an appreciable leg-up in its quest to become a dominant force in PC sales. Following the rumour, the Japanese company's shares jumped by almost five per cent on the Tokyo Stock Exchange.

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