Archive News: Despite low cash, Lenovo exec upbeat on RP

[Submitted by Dennis D. Estopace, Reporter, to BusinessMirror
September 01, 2010]

THE local executive of the world's fourth-largest computer maker is
upbeat Lenovo will expand its Philippine operations, despite beginning
the year with low cash.
"The double-digit [10.2-percent] market share that we now enjoy is
very important. As you gain more market share, you see you're on the
road to profitability and you can scale up the business in terms of
other avenues," Lenovo (Singapore) Pte. Ltd. Philippine Representative
Office executive Maria Victoria Agorrilla said.
Agorrilla, Lenovo country general manager, spoke to BusinessMirror
after Lenovo announced year-over-year sales of US$5.1 billion in its
first quarter ended June.
The Beijing, China-headquartered manufacturer that bought the computer
segment of US firm International Business Machine (IBM) Corp. said in
a statement dated August 19 that the volume of its computer shipments
during its first fiscal quarter was double than industry expectations
at 48.1 percent worldwide.
"Net cash reserves as of June 30 totaled US$2.2 billion," the statement added.
The company's Philippine sales office, on the other hand, began its
operations with 96.29-percent lower cash at P0.662 million compared to
when it began with P17.895 million in 2009, the company said in its
financial report to the Securities and Exchange Commission (SEC).
Lenovo said in its report to the SEC that its representative office
"doesn't earn or derive income from operations in the Philippines."
All of its expenses are financed solely by its head office in
Singapore, it added.
To note, remittance from the Singapore head office to the Philippines
for fiscal year 2010 went down by 48.90 percent to P11.04 million from
P21.62 million in the company's previous fiscal year that begins
But while Agorrilla said company policies restrict what she can
announce, she noted that Lenovo has identified the consumer and small
businesses segment as "growth areas" in the Philippines.
"In the enterprise segment, we already have a foothold because of the
IBM heritage, so we have to look into new markets for growth. The
consumer and small business are growth areas for us, that's why we're
putting a lot of efforts to capture those two markets."
Currently, Lenovo is selling computers in the Philippines under its
Think and Idea series that begin above US$500 each. The company's
laptop computers segment remains its biggest source of revenue with a
60.5-percent share in worldwide sales.
After re-purchasing the mobile business it sold, Lenovo said it has
launched its smartphone business in China during the first quarter
that began April this year.
"We're part of the brands that really saw the influx of mobile users
in the Philippines. More people are tuning up to mobile internet
devices and eventually there will be phones like these," Agorrilla
However, she added there's "no specific date for this part of the
world" for the launch of Lenovo's smartphone.
"But if we're doing well, then we should be there [in the smartphone market]."
Lenovo's Philippine business is operated by ten employees, according
to its filing with the SEC. It is also tax-exempt being a
non-generating revenue enterprise.

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