As mobile devices function more and more like personal computers, it cannot be denied that the demand for PCs is significantly declining. But remarkably, the waning interest in PCs doesn’t seem to affect Lenovo much, as they are now considered to be the number one PC vendor in the market, knocking HP off its throne.
Lenovo sold 13.8 million PCs and it’s because of their approach to cater to different demographics. They have computers for home or office use, laptops styled for business people, and even ones that look stylish and fresh for the younger demographic. Also, much of their success is attributed to their very aggressive position in pricing their products.
Nevertheless, Lenovo knows that the PC industry is quite unstable, and they’ve already set out to conquer the mobile industry next. Right now, the mobile leaders are Apple and Samsung, but Lenovo’s mobile offerings such as the LePhone are faring well in the market. Lenovo’s done quite well in China, and has its sights set on the entire world.
In China, Lenovo sold 8.6 million phones, including 7 million smartphones during the second quarter of this year, putting them in second place behind Samsung. This is big for the electronics manufacturer, especially with the fact that of the top five mobile vendors in China, Apple is no longer on the short list.
Apple’s demise in China can be due to a number of reasons: Chinese people prefer purchasing homegrown products such as Lenovo’s, and there’s a growing number of people interested in purchasing hybrids instead of tablets.
“From our competitor’s recent earnings announcement, you can find that the emotional attachment to tablets has gone down,” said Lenovo CEO Yang Yuanqing in a conference call.
Yang believes that their Yoga hybrid is the future of both their PC and mobile efforts. Though the mobile market is a most certain focus for competitive companies these days, analysts believe that the PC business will still be the bread and butter of Lenovo.
“Obviously their cash cow is still going to be PCs, so they will use their PC business to expand into tablets and smartphones,” said Jonathan Ng, an analyst with CIMB in Singapore.
The ultimate goal for Lenovo is to translate their mobile success in China to other markets and they are going to do it a step at time, going from emerging markets and eventually to mature markets.
“We’ve had success in China. For the next step, we want to expand in the emerging markets first, then mature markets,” Yang said. The company derives nearly half of its total revenues from China.
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