Chairman and CEO of Lenovo, Yang Yuanqing has interview with Fortune magazine recently, he said about the high-end PC products and large-screen smartphone will get more consumers, while tablet PC become a niche product, the computer is about to enter PC+ era.
While the PC industry is not optimistic for the future, but the association did not feel worried. Last week, this Chinese PC manufacturers have announced the latest quarterly earnings report, the strong performance of its revenues and profits, even in PC shipments decline in the market is also true. Lenovo is likely to replace its main competitors – Hewlett-Packard has become the new overlord of the global PC industry. The strong rise of the Tablet PC as well as PC demand continued to decline, which makes the people in the industry worried about the prospects for the PC industry, but Lenovo still confident. Yang Yuanqing, Lenovo Chairman and CEO to accept an interview with Fortune magazine, he said: “The Tablet PC is a very innovative product, effective supplement to the traditional PC. Many people believe that the Tablet PC will be eroded shipments of PC products, but I don’t think so.”
Yang believes that high-end PC products and large-screen smartphone will get more consumers, Tablet PC become a niche product, the computer is about to enter the “PC+ era”.
He also told the future of the PC industry to make a variety of forecasts, Yang Yuanqing point of view is only one of them. In the past three years, the association with practical action to prove the observation of the company is stronger than most of its competitors. According to data provided by market research firm IDC, Lenovo in the global PC market share has reached 15%, slightly lower than HP’s 15.7%, while in 2009, only 9% share of Lenovo. Last quarter, Lenovo’s PC shipments grew 24%, while the overall PC industry shipments fell 2%.
Outstanding performance in developing markets, is the key to Lenovo’s market share growth. For example, on the first quarter of Lenovo’s market share in China reached 35%, a record high, while computer penetration in the Chinese market is only one fifth of the U.S. market. In the U.S., the PC penetration reached almost 100%.
China’s small cities and rural markets PC penetration is very low, Lenovo attaches great importance to these markets, has been set up more than 30,000 sales outlets in China. In contrast, the city is the center of the apple only six retail stores in China. Lenovo has been deeply rooted in the Chinese market, said Yang Yuanqing, even in remote areas not in the truck, the association will be to find ways to bicycles and even a donkey cart to delivery.
In other markets, Lenovo abandon the high margin development strategy, turn to seize the market at low prices, to achieve substantial growth in shipments. Citigroup analysts believe that Lenovo has breakthrough double-digit market share in 35 countries, only 12 countries a year ago, an increase of nearly twice that. Said Yang Yuanqing, Lenovo’s focus on developing markets shipment growth for the company, which provides a huge space, which is Lenovo still the main reason for the excellent results achieved in the PC market demand weakened.
Said Yang Yuanqing, Lenovo’s investments outside of the PC business is the company’s revenue growth in another key. Currently, the mobile technology sector revenue accounted for 7.3 percent of Lenovo’s total revenue from the newly formed, 3.6% higher than the same period last year. In 2011, Lenovo sold in the Chinese market seven million mobile phones, of which 5 million are smartphones. Mobile technology department set up soon, but Lenovo’s share of the smartphone market in China has been close to 10%, just behind Samsung Electronics, and is expected to achieve profitability in the near future.
Lenovo also entered the server industry, the company recently announced that it will jointly develop with EMC storage server products. Lenovo, the deal is expected to create billions of dollars in revenue for the company in the coming years. Barclays Capital analyst released a research report said, “Lenovo had a focus on the Chinese market, PC manufacturers in the U.S. market, but now has been transformed into one to get involved in a number of emerging markets, with consumer products, PC, smart phone, Tablet PC and server diversified company.
Some people are worried, Lenovo can not avoid the decline caused by the impact of the industry as a whole. IDC research director David Daoud (David Daoud) said: “Lenovo performance than the competition a lot better but facing the environment and opponent. Problem is Lenovo’s ability to perform well as in the past, there are many factors to consider. ‘
Global PC shipments fell is a factor, China’s economic slowdown is also a factor. China sales accounted for 42 percent of Lenovo’s total sales, in July, the Chinese economy is slowing down. Yang said: “Indeed there is some uncertainty.” He believes that one of the main reasons is the control of the government of the housing bubble, there is the impact of the global economic slowdown on China’s exports. Yang believes that these will not cause a lasting impact. The long run, Yang ground optimistic about China’s economy and the PC market.
Whole, China’s PC shipments fell 3%, but Lenovo in China grew by 9%. Yang believes that a successful part of the reason is to understand the market. Yang welcomed to the competition.