31 May, 2005

dell, a new toshiba?

In the war for China’s laptops (and desk tops), Lenovo has some advantages over competitor Dell. Lenovo is majority state-owned. It is one of the country’s better state-run companies, the Hong Kong-listed ones do have to meet stricter disclosure requirements, but it would still in theory have access to all of the policy-loan goodies handed out by China’s state run banks.

Moreover, it has a friendly state-run press that is more than willing to publish comments like this (via China Daily) about competitor Dell, which is allegedly playing up Lenovo’s government links to boost US sales:

"It is a conscienceless move," said Shen Dingli, professor with American Studies Centre under Fudan University
and an expert on American culture. "It is hardly for the Americans to
accept the fact that Lenovo, a poor fellow in their eyes, purchased IBM
PC business. They could tolerate acquisition by Japanese
enterprises, but they can not stand Chinese purchase, which, in their
view, is a kind of technical aggression," noted professor Shen.
"I feel shame for Dell computer’s possible move to get a upper
hand in the market competition at the cost of defaming China and
Chinese enterprises," further added professor Shen.

Playing up anti-Japanese sentiments and displacing them toward Dell? Fascinating! Perhaps Dell will become another Toshiba (via Feer):

…Problems arose when Toshiba did not offer a similar settlement to Chinese
consumers. On May 8, 2000, a Beijing-based Web site received a report of the
settlement from a U.S consumer, and posted it. Toshiba offered to supply Chinese
customers with free software patches in order to fix the flaw, but declined to
offer any monetary compensation…
The Internet played a big role in the anti-Toshiba campaigns. In reaction to the
news of the settlement, a hacker by the name of Miss Assassin infiltrated
Toshiba’s Chinese website and left behind the message: “Annihilate the Japanese
devils! Hang their Chinese collaborators!” Hundreds of messages supporting the
hacker were posted on the Web. China’s popular Web site sina.com displayed
further representative remarks…
Following the incident, Toshiba dropped from its position as No. 1 laptop
supplier in China to No. 3, after Legend and IBM, and its market share dropped
to 15% from 19% in the second quarter of 2000.

For what it’s worth, I believe that Dell likely did try to play up Lenovo’s links to the Chinese government to boost US sales. Still, I see no reason to doubt that Lenovo will try to exploit these links for their own interests in China.

Still, excessive friction here will be unhelpful in the current environment. For what it’s worth, they both suck. (I use a Mac.)

by @ 8:00 pm. Filed under China, Economy, Northeast Asia

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