Lenovo: "The PC Will Not Die"
June 7, 2013 7:32 PM
comment(s) - last by
Company is eyeing expansions into the server and storage markets, plus smartphone expansion, but remains PC loyal
Beijing, China-based Lenovo Group, Ltd. (
) is intent on continuing its meteoric rise and ambitious plans to displace traditional personal computer OEMs like Hewlett-Packard Comp. (
) atop the list in international computer shipments. Currently in
second place in PC sales
, Lenovo opened a
$1B USD line
in North Carolina. And already
#3 in Chinese smartphone sales
, Lenovo is
eyeing a U.S. smartphone push
But its plans don't stop there.
I. IBM Server Division is on Lenovo's Radar
CEO Yang Yuanqing
spoke to reporters
in the southwestern city of Chengdu, China at the
Fortune Global Forum
, commenting, "Servers and storage is the business we want to expand and develop. If there is an acquisition opportunity, we will take it."
Having already purchased International Business Machines, Inc.'s (
) personal computer business
back in 2005
, Lenovo is rumored to be considering jumping straight to the top of the server market, exploring a purchase of the veteran U.S. firm's server business.
Lenovo CEO Yang Yuanqing [Image Source: Reuters]
IBM's server unit is currently
vying with HP's for the top spot in global sales
. When it comes to a sale to Lenovo, though, price has reportedly been a stumbling block in the pair's discussions.
Lenovo is greedily eyeing IBM's server division. [Image Source: IBM]
Servers are a lucrative and coveted business. Server sales have helped U.S. manufacturers like HP and Dell, Inc. (
). Chipmaker Advanced Micro Devices, Inc. (
spent $334M USD
. So far that deal has been
working out well for AMD
, who like its PC OEM counterparts is using its server unit to offset losses from other divisions.
II. Tough Challenges Ahead to Keep up With Exploding Smartphone Growth
He also discussed the smartphone push, explaining that his company's plan is to first expand into other emerging markets (like Brazil or Mexico) then move on to the most profitable top markets, like the U.S. He comments, "We will be in developed markets in a year. The gross margin for smartphones is better than PCs -- when you have scale, you will make money."
Lenovo will have to vie with domestic rival
), who has similar ambitions. Huawei is still outselling Lenovo in the smartphone market
moving 9.9 million smartphones
in the Q1 2013, versus 7.9 million for Lenovo. But Lenovo is growing faster -- its sales more than double from a mere 2.5 million units in Q1 2012, while Huawei's sales "merely" doubled from 5.1 million in Q1 2012 [
The gadgetmaker also faces a tough challenge from market giants Apple, Inc. (
) and Samsung Electronics Comp., Ltd. (
) who spent years carefully generating strong brand images in the U.S. and Europe.
Lenovo is eyeing a global smartphone push. [Image Source: Jason Mick/DailyTech]
Lenovo also bucked the general slump in the PC market, essentially holding steady at 11.7 million units. Combined with the strong smartphone growth, Lenovo managed to
increase its profit 90 percent
on a year-to-year basis.
Mr. Yang says the key reason why his company is hanging on while other PC manufactuers drop off is his company's willingness to offer optimized hybrid form-factors like the
Lenovo Yoga tablets-cum-laptops
. He comments, "The PC will not die. [But] the future PC is not the past PC."
This article is over a month old, voting and posting comments is disabled
PC will never die
6/9/2013 11:58:17 AM
Everyone I know who owns a tablet or smartphone also owns a laptop and/or desktop. tablets and smartphones are not a competitive product with PCs, they are a supplement. Tablets and phones are for high mobility and quick use, but when you want to write a paper, do research, watch a movie, play a game, etc, yeah a tablet or smartphone can do it, but it will always be more productive and enjoyable to do so on a 4x larger screen with a full size keyboard and a mouse.
The main reason I think PC sales are declining is not due to tablets and phones, but more so with the slower rate of progress in hardware advancements in the past decade, allowing people to get by with older hardware than they used to. A 1996 computer compared to a 2000 computer was night and day. A 2009 compared to a 2013 is not.
RE: PC will never die
6/9/2013 12:40:42 PM
Yeah people blindly compare sales numbers and conclude "everyone replaces PCs with smartphones" which is simply BS.
People don't buy new PCs / laptop that much anymore not because they use smartphones and tablets instead but because what they already have is considered "good enough" i.e they have no reason to replace it that often anymore.
RE: PC will never die
6/9/2013 9:39:39 PM
Another reason is Windows 8. I don't want to get into an argument about Windows 8 but it has contributed to the decline of PC sales. I met someone who ordered a Windows 7 laptop from HP and she told me there was a 2 week delay for Windows 7 laptops because of high demand. Whether you like Windows 8 or not is irrelevant or whether or not its reputation is justified or not is also irrelevant. People don't want it. But for HP to have a 2 week delay with Windows 7 models shows that people want Windows 7 computers.
(By the way, if I understand it correctly, the Windows 7 models do not have the secure boot option which is why they don't try to sell the same laptop for both Windows 8 and Windows 7.)
RE: PC will never die
6/11/2013 8:40:38 AM
Sure, but People who actually have an opinion on Windows 8 are People who already own and use a PC. They are just holding back on replacing their existing PC, but they will very likely do it in the not-so-far future.
Indeed, I do believe that tablets have a stronger impact on PC sales as the perceived quality of Win8 does. Sure, nobody is replacing the PC with a tablet, but a lot of people with a restricted budget for electronic toys will consider to buy their first tablet instead of replacing the still-good-enough PC right now. This will normalize over the next few years, once most people own a good-enough tablet.
Unless some interesting stuff starts happening to the market, e.g. GPUs starting to wander into the screens and tablets getting Thunderbolt interfaces. Then all bets are off.
"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer
Lenovo Launches Its First U.S. PC Manufacturing Line in North Carolina
June 6, 2013, 12:32 PM
Samsung Tops Chinese Smartphone Sales, Apple Stuck in Sixth Place
May 28, 2013, 9:06 AM
Lenovo Eyes Smartphone Push in the U.S.
May 27, 2013, 9:39 AM
Lenovo Reports Solid Fiscal Q4, Full-Year Financials
May 23, 2013, 9:22 AM
Intel-Based Lenovo Yoga 11 Lands, is $240 USD More Expensive Than ARM Version
May 17, 2013, 11:02 AM
LinkNYC Terminals to Blanket New York City With Free WiFi, Free Calls, and Ads
November 17, 2014, 6:50 PM
Microsoft is Open-Sourcing Most of .NET, Adding OS X and Linux Support
November 12, 2014, 8:27 PM
Home Depot Lost 53 Million Emails, Blames Windows, Buys Execs New Macs
November 9, 2014, 5:00 PM
Former NSA Lawyer: If Google, Apple Encrypt User Data, They’ll Wither on the Vine Like Blackberry
November 6, 2014, 12:15 PM
Report: AT&T Eyeing $40B DirecTV Purchase
May 1, 2014, 8:00 AM
WebOS Class Action Settlement Costs HP $57 Million
April 1, 2014, 10:22 AM
Most Popular Articles
Wal-Mart: Miss Thanksgiving, Get Xbox One + Master Chief Collection for $299
November 17, 2014, 9:40 PM
Nokia Lumia 635 LTE Windows Phone is Only $40 at Best Buy on Black Friday
November 18, 2014, 11:59 AM
Uber Exec Threatens to "Spend Millions" to Stalk Female Reporter and Her Family
November 19, 2014, 12:31 PM
Toyota’s Mirai Hydrogen Fuel Cell Vehicle Priced from $57,500 in the U.S.
November 18, 2014, 10:23 AM
Apple Replaces “FREE” Label with “GET” on App Downloads in iTunes App Store
November 19, 2014, 5:38 PM
Latest Blog Posts
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information