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Here’s why Lenovo is sticking with PCs

Chinese electronics giant Lenovo is looking to extend its grip on the PC space as it remains bullish on its dominance of what is a declining market.

Lenovo is the world's largest PC maker with a fifth of the world's market share, according to consultancy IDC, but saw shipments decline 7.5 percent year-on-year in the second quarter to 13.4 million units. Overall the PC market declined 11.8 percent.

But one Lenovo executive said that future consolidation in the market is keeping the company's outlook positive on the market.

"We are starting to see a big consolidation in the market… We think that probably within the next 24 months, maybe four to five players will leave," Gianfranco Lanci, chief operating officer at Lenovo told CNBC, in an interview last week.

"Four to five players leaving…means that you can have a different ambition in terms of market share, because with a big number of players, 20 percent share is a very good share, but with four or five players, 20 percent share is not a good share. We need to think about something much more ambitious."



Windows 10 boost?

PCs make up around 63 percent of Lenovo's total revenues. In the fourth quarter, the company's PC unit – which includes desktops and their tablet business – saw sales hit $7.2 billion, with pre-tax income of US$391 million, up 11 percent year-over-year, according to official results.

People check out the computers on display at the Miami Marlins Park, in Miami.
Getty Images
People check out the computers on display at the Miami Marlins Park, in Miami.

But tablets and now the increasing ability for people to carry out complicated tasks on their smartphones, has dented the overall PC industry. In a bid to counter this, companies have been attempting to experiment with new devices. Microsoft has a product called the Surface 3, a hybrid tablet that has a keyboard attached. Lenovo's Yoga 3 tablet has a similar design and runs on Windows.

Lanci said this is where the company will continue to focus, given the popularity of these products.

Read MoreLenovo eyes smartphone domination with Motorola

"I think that where you see growth is for sure in the hybrid space being convertible, being 2-in-1 and I think we will continue to see it," the COO told CNBC.

PC makers are now looking at the release of Windows 10 next week to help reinvigorate the market, though IDC notes that people will upgrade their operating system without buying a new PC. This could mean PC sales will remain subdued for the second half of the year. But Lanci said he is confident Microsoft's new OS will be a success.

"We are quite confident that Windows 10 will be successful and it will help PCs for sure," Lanci told CNBC.