Lenovo has partnered with original device manufacturer Compal to set-up a joint venture to develop laptops and all-in-one desktops.
The companies plan to invest $100 million in the joint venture; Lenovo will have a 51 percent stake while the rest will belong to Compal. Both companies state they may invest an additional $200 million depending on market conditions.
The joint venture will help fund a manufacturing unit in China, which will be up and running by the end of 2012. The unit will become an exclusive manufacturer for Lenovo and help the company get its products to the marketplace much faster.
Sources have told The Wall Street Journal this is the first time that Compal has partnered with a company like Lenovo. Compal is already a major product make for Lenovo and is looking to deepen its ties with the company.
Under the joint venture, which is called Lienpal, Lenovo has the option of buying all of Compal’s shares in the future. Lenovo is one of Compal’s three biggest clients and claims that it is committed to the PC market, which is undergoing a major slump thanks to the rise of smartphones and tablet PCs.