Lenovo CEO: Apple lacks diversification in China

Cupertino's high pricing puts devices out of reach for lower-income bracket, Yang Yuanqing criticizes, noting his company caters to wider customer segment, according to report.

Days after Apple's second-quarter revenue in Greater China reportedly surpassed Lenovo's, the Chinese PC maker's CEO Yang Yuanqing said its rival's strategy in the world's most populous nation neglects the lower-income market segment.

According to a Monday report by ZDNet Asia's sister site www.zol.com.cn, Yang told the Chinese media that Apple's strategy to focus on the high-end market means the U.S. company is not able to satisfy the needs of Chinese consumers at the lower-income level.

"Apple only occupies the high-end market. The high price tag of US$500 will not work in small cities, rural areas or lower-income segment," said Yang. "I'm not saying we're deliberately pushing down the price but our strategy is to provide more categories of products and to cover the different niche markets."

Commenting on the tablet scene in which Apple is the dominant player, Yang said he believes the tablet market will undergo a shift similar to the PC market. IBM was the dominant player in the past but the PC market has since diversified, he explained.

He added that the growth of tablets will not affect Lenovo's mobile PC market as both segments will grow alongside--not cannibalize--each other.

The CEO's comments came days after media reports revealed Apple's second-quarter earnings in the Greater China region, including Hong Kong and Taiwan, outperformed Lenovo. Apple's revenue grew six times to reach US$3.8 billion in the region while Lenovo earned US$2.8 billion in its home market, the AFP reported.

According to Apple's Web site, the company currently has four official stores in Beijing and Shanghai. However, unauthorized Apple Stores have mushroomed in the country, riding on the company's success. Last month, some of the fake Apple Stores were ordered by officials to terminate their operations as they did not have the relevant business licenses. One of the stores has since rebranded itself.

Apple's iPhone reached Chinese shores in November 2009. A year later, the iPhone 4 went on sale in China three months after it made its debut in the United States.