Síragon aims to steal 2nd place from Lenovo

Friday, February 9, 2007

Venezuelan PC manufacturer Síragon plans to displace China's Lenovo as the market's second highest selling PC manufacturer in terms of units by year-end, Síragon's commercial director Lorenzo Rubín told BNamericas.

At the end of 2006, international tech consultancy IDC placed Síragon as the third largest vendor in the Venezuelan PC market with a 6% share after Hewlett-Packard (NYSE: HP) and Lenovo, Rubín said. Síragon surpassed Dell (Nasdaq: DELL) that now holds fourth position.

The executive bases his growth expectations not only on increasing sales forecasts for Síragon but also on the global decline in sales Lenovo has experienced.

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Lenovo saw shipments in the Americas region, including North and Latin America, decrease 4% during the company's third fiscal quarter, ended December 31, with sales down 9% to US$1.04bn compared to US$1.15bn in the year-ago period, according to Lenovo financial statements.

In 2006, Síragon sold 28,000 desktops and 10,000 laptops and also entered the servers market and is now assembling almost 200 units per month. For this year, the company aims to grow desktop sales to 50,000 units and sell 22,000-25,000 laptops.

According to preliminary figures from IDC, the total number of desktops sold in 2006 in Venezuela reached 470,000 units while there were 148,000 laptops sold.

"IDC says that in the Venezuelan market, there is one laptop sold for every eight desktops. Our proportion is one laptop per 2.5 desktops. And our strategy was based on breaking the gap between desktops and laptops by launching an entry-level laptop. So for US$80-100, the user can go mobile," Rubín said.

On average, Síragon's prices are 20-25% lower than similar products offered by multinationals. According to Rubín, customers can save up to 15% when buying a Síragon PC and up to 50% for a server.

Síragon aims for sales to the residential and corporate segments to be equally balanced this year compared to 2006, when the residential segment contributed 70% of total PC sales. Clients in the corporate segment, particularly for servers, include bank Banco Canarias, state oil company PDVSA and the local unit of Spanish enterprise IT solutions provider Azertia.

With over three years of operations and part of the Venezuelan holding Greentech, Síragon markets its PCs in alliance with Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT). The firm also sells PC monitors, LCD monitors, LCD and plasma TVs, and sound systems.

During the last three years, the company has entirely focused on the Venezuelan market but the company plans expand in Latin America, in order to have external operations up and running by the end of the first half of this year.

"Before July we will have operations outside the country and we are evaluating the Mercosur [trade bloc] because as manufacturers we receive benefits such as tax exemptions. Although we are also evaluating [other trade blocs such as] Andean Pact and [Caribbean Community] Caricom," Rubín added.