CIARA O’BRIEN
The growth in popularity of tablets and smartphones coupled with an economic slowdown has wreaked havoc on the PC industry. Sales have slowed dramatically in recent years, as consumers increasingly turn to mobile devices to look after their everyday computing.
It has led to dire predictions about the future of the industry, as companies such as Apple talk about a “post PC” era, leading to the conclusion that the humble desktop and laptop may be in their dying days.
But at least one company is confident that the end of the PC has been slightly prematurely heralded. Chinese PC maker Lenovo thinks that computers will be around for some time to come – just in a different form.
"The PC is not going to die, but it will change," explained Leo Curtis, a senior executive consultant with Lenovo. "The idea of a personal technology device still exists."
It's a philosophy that is held at the very top of Lenovo's management structure.
Chairman and chief executive Yuanqing Yang has said on previous occasions that the PC will remain central to the digital lives of millions, and will be at the heart of an ecosystem of tablets, smart phones and smart TVs.
You could say that to some extent, Lenovo is hedging its bets as it expands its product range into new areas such as smartphones, tablets, hybrid devices.
The innovation centre located at Lenovo's sprawling Beijing facility showcases some of Lenovo's latest and greatest products, from desktops and all in one devices to table top PCs and the latest mobile products.
And it is adding to them continually. Lenovo owns 6,100 active global patents, and continues to come up with new ideas all the time.
"Innovation today is based out of necessity, no longer out of desire," said Curtis. "We all made the same mistake in the 1990s, everybody in the industry said there was going to be one product that everyone would use and everything else would be gone. We all have input and output desires that are different from everyone else."
The company, which has built its business on the PC and its popularity over the years, is aiming its sights firmly on the global market and aiming to become the top PC brand worldwide. In Ireland, it is currently number four; globally, it is number two.
At the heart of that strategy is its products, which Lenovo hopes will entice consumers to its vision of the new PC era.
Before the iPad was even formally announced by Apple, Lenovo was winning design awards for what is now known as the Yoga, a hybrid device that combines touch screen and traditional laptop features in a new way. Lenovo acknowledges that the device was ahead of its time, but it is indicative of how the company is trying to keep ahead of trends.
"The industry is going to change in the next five years, and we want to be the one on top of that change, not following," said Curtis.
Things have certainly changed for Lenovo over the years. From its beginnings as Legend in China, the first company to develop a Chinese character card for the compute and subsequently launch a home internet machine that connected at the touch of a button, Lenovo has staked its territory in its home market.
The Lenovo brand was born in 2004, and things changed dramatically when the company bought IBM’s PC unit in 2005, propelling it to the global stage. It now has more than 30,000 employees in 60 countries around the world, including a small operation in Ireland where it employs 31 people. Lenovo has built up a customer base in more than 160 countries, with headquarters in China and the US; research centres in Japan and the US; and manufacturing in the US, Mexico, India, China and Brazil.
It’s a $30 billion business, and Lenovo is targeting further growth in the coming years.
Some of that growth could lead to more oppportunities for its Irish team, which currently supports customer and business partner sales, and has an operations and an eCommerce team. Lenovo has operated in ireland since 2006, thanks to the IBM takeover. With the company expecting further growth in the ecommerce business, that could see the Irish team scale to support new markets.
But there are some challenges facing the company's ambitions. If it wants to be number one in the world, it's not enough to be dominant in China, despite the size of the consumer market there. The company will also have to up its game in Europe.
That effort has already begun and Lenovo is hoping to take Europe by storm. The company opened its dedicated EMEA unit in 2012, recruiting former Acer head Gianfranco Lanci as president of Lenovo EMEA.
In the smartphone market, Lenovo already has a foothold in the Chinese market, one of the largest in the world. Its Intel-powered smartphones have made it the number two in the market there, and Lenovo plans to release its smartphones into additional countries over the next year.
However, it will not launch its smartphones in western Europe until 2014. On the surface, it's a curious tactic. Rivals such as Samsung, Apple, HTC and Sony have already built up market share in western Europe, and waiting an additional year to make its entrance into the market puts Lenovo at a further disadvantage.
But Lenovo says the delay is due to its wish to get it right.
The company is concentrating its firepower on emerging markets before targeting the more mature territories.
“China is the proper market to break through first. We started the smartphone busines three yeras ago in China and it’s been bvery successful,” said Yang. “The next step is other emerging markets. We want to see te success there, abnd then move to the mature markets.”
One other potential stumbling block for the company could be any perception that it is controlled in any way by the Chinese government. When a potential takeover of Blackberry maker Research In Motion was rumoured, some commentators noted that the notion of Chinese firm taking over a company that counts US government departments among its
Lenovo executives are remaining tight lipped about Blackberry, but the questions over its origins still remain. Although the government still owns a stake in Lenovo's parent company, Legend, in return for grant money it invested at its establishment, its effective share in Lenovo is in the region of 10 per cent. According to Lenovo, the company operates independently of state influence.
The company has largely escaped the perception of it as a traditional Chinese firm. Its executives are drawn from more than seven countries, and combined with its listing on the Hong Kong stock exchange and the accompanying strict regulation, its executives aren’t worried.
“Without a global culture, it’s difficult to be successful,” says Gianfranco Lanci.
While the transformation of the desktopinto a touchscreen interface has been helped in parts by Windows 8, the software still has some room for improvement, according to Yang.
“ I believe Windows 8 is in the right direction,” said Yang. “We still need to take some time to educate the market and end users how to leverage the advantages.
“I wouldn’t say it’s perfect; it still has a lot of room to improve to meet the customers’ requirement.”
But despite the stumbling blocks, Lenovo is still expecting decent growth in the coming year, as it eyes the server busines and hopes to persuade customers to opt for its convertible machines.
