Technology firms continue to grow global foothold

The world's second-largest economy is gradually gaining international prominence in some key IT equipment sectors, including PCs, smartphones and tablets

China's information technology equipment giants have been arming themselves with a steady stream of new technology, and the very best in local talent.

But as they continue to gain a global presence, some industry insiders are suggesting that the biggest players now need be aiming at the higher end of the manufacturing market.

According to a new report released by IT research firm Flurry Analytics on Monday, China has now overtaken the United States as the world's biggest market for active Android and iOS smartphones and tablets.

By the end of this month, it estimates, the Chinese population will own 246 million smart devices compared to 230 million in the US, the first month China has moved ahead of the US.

"The US will not take back the lead from China, given the vast difference in the populations of each country," said an accompanying report from Flurry, highlighting that China has more than 1.3 billion people, against 310 million in the US.

Lenovo breakthrough

One of China's greatest international technology successes has been Beijing-based Lenovo Group Ltd.

In the third quarter of 2012, Lenovo became the world's largest personal computer maker, surpassing Hewlett-Packard Co — the first time a Chinese company has taken the industry lead.

Lenovo managed to grab a 15.7 percent global market share against HP's 15.5 percent, according to industry research company Gartner Inc, the first time since the third quarter of 2006 that the US giant has failed to come out on top.

Although HP was able to reclaim the lead in the fourth quarter, industry insiders suggest it's just a matter of time before the Chinese company takes a permanent hold of the title.

"In addition to acquiring other vendors, Lenovo has taken an aggressive position on pricing, especially in the professional market," said Gartner.

"As a result, it has achieved significant market share gains over the last two years, exceeding regional average growth rates across all regions."

Scott Lin, Greater China president of PC maker Acer Inc, said that despite it becoming increasingly difficult for single companies to dominate entire industrial chains, more Chinese companies — which in most cases are still following market leaders — are likely to become No 1s in their specific fields.

"The US used to dominate the world's IT industry, but that was before Japan took over the display and memory sectors some 20 years ago. Now, IT companies in Taiwan have taken the lead in touch screen and transformable ultrabook manufacturing," said Lin.

Lenovo invested heavily in the mobile sector in 2012, paving the way for a furious battle with Samsung Electronics Co Ltd and Apple Inc for dominance of the sector.

In October, it opened a new research center in Nanjing, the capital city of the East China province of Jiangsu, to develop smartphones and other mobile devices for overseas.

Its mobile division entered five new markets during the year, including India and Russia.

Data from industry consultant IDC showed that Lenovo had taken an 11 percent share of China's smartphone market by the second quarter.

The company showed very well, that "you have to know your strengths, and utilize them in order to survive in the market", added Lin.

For many domestic and overseas manufacturers, China's biggest strength has been its low labor costs.

But increasing numbers have found the world's second-largest economy is losing its edge on that front to other Asian countries such as Vietnam, Myanmar and Bangladesh, and there is growing pressure on companies to try and figure out ways to regain that advantage.