BEIJING, June 2 -- Although the Lenovo Group Ltd lost market share to its overseas rivals in the first quarter, it is still No. 1 in the Chinese personal computer market, said a latest report by IDC, a US-based consultancy.

    Lenovo, which became the world's third-largest PC vendor after acquiring International Business Machines' PC unit for US$1.25 billion, saw its share of the domestic market cut dramatically to 31.3 percent during January to March against 36 percent in the previous quarter, IDC said.

    In the period, Dell Inc, the third-largest player in China, posted a market share of 9.3 percent, up from 9.1 percent in the fourth quarter. Hewlett-Packard Inc, the No. 4, had 7.7 percent, a jump from 6.8 percent in the fourth quarter, according to IDC.

    "But when you compare it year on year, it's still a gain," IDC analyst Bryan Ma was quoted by Reuters as saying.

    Lenovo's first-quarter figure was up from the first quarter of 2005, when Lenovo and IBM posted a combined share of 29.6 percent of the market.

    Dell Inc opened its second plant in China earlier this week in Xiamen, Fujian Province, to double production capacity in the country. But the world's No. 1 player didn't disclose the exact capacity.

    HP has cut its price in the past year to make its products more affordable to Chinese consumers. For example, HP adopted low-cost AMD chips in 70 percent of its PCs sold in China to compete with domestic rivals like Lenovo and No. 2 Founder whose market share was 12.7 percent in the first quarter against 12.5 percent in the fourth quarter last year.

    Yang Yuanqing, Lenovo's chairman, was quoted in Beijing recently as saying the firm will use a low-price strategy to grab a bigger market pie in China as it is concerned about the market share rather than profit.

    In the first quarter, Lenovo posted a loss of HK$903 million (US$115.7 million) due to job cut costs.

    (Source: Shanghai Daily)