PC Market Showing Signs Of Life

The PC market is showing some signs of growth, with Intel boosting its revenue guidance based on improved chip shipments.

Is Acer Doomed?

Taiwanese PC maker Acer reported worse-than-expected quarterly loss. Actually, it had been expected to be bad, but no one had predicted it would be this bad.

For the fourth quarter, the world’s No.4 PC vendor reported a net loss of $254 million. The company had posted a worse-than-expected net loss of $446 million in the third quarter and a $112.31 million loss in the same quarter of 2012. In short, its troubles have been getting worse for more than two years.

At the end of last year the company named former Taiwan Semiconductor Manufacturing Co sales executive Jason Chen as its new CEO and launched a new initiative to integrate hardware, software and cloud services. It will be a while before the new broom can sweep out two years of doom, so many are expecting more doom to emerge. Acer relied too heavily on making low-end laptops, which weakened its brand, it also missed the shift to mobile.

Acer’s senior executives are taking a 30 per cent voluntary salary cut starting January, the company said in a statement.

Source

Can Acer Go High-End?

Most popular for its low-cost laptops, Acer doesn’t really inspire thoughts of premium products. But building high-end hardware could be the Taiwanese vendor’s best chance as it looks for a way to rescue its struggling business.

With consumers flocking to tablets and smartphones, Acer’s once-thriving PC business has been left in the dust. Quarterly financial losses have become routine at the company and its PC shipments declined more sharply in the past year than at any other major vendor, according to IDC.

The grim situation forced CEO J.T. Wang to resign from his post last Tuesday. Acer will also cut 7 percent of its global workforce and has assembled an advisory committee to come up with a new strategy, the company announced.

Bright spots are hard to find. The Wintel model that propelled Acer for years and helped it become the second-largest PC vendor in 2009 has been falling apart amid the demand for mobile gadgets. And Windows 8 and Intel’s Ultrabook strategy have failed to resuscitate the market.

It hasn’t helped that Acer is so reliant on sales to consumers, said IDC analyst Bryan Ma. The entire PC industry has been hurt by tablets, but Dell and Hewlett-Packard have at least managed to find cover selling PCs to businesses, which are still buying them. And Lenovo has capitalized on its position in China, now the world’s largest PC market.

“Acer didn’t really have the commercial PC business to protect themselves. That’s why they were hit harder,” Ma said.

Acer — whether to its benefit or detriment — has instead gained a reputation for low-priced PCs. Even in tablets it has tried to undercut rivals — its Iconia W4, an 8-inch Windows 8.1 tablet, starts at US$329.99, while its Iconia B Android tablet goes for $129.99. The low prices have helped keep the company on consumers’ radar, but at the expense of profits.

One option for Acer is to build a brand as a higher-end PC player. It took a step in that direction last year with the Aspire S7, a Windows laptop with a slender, aluminum chassis that sells for $1,200 and up. That product and its successors have had some success for the company, with sales of 2,000 to 3,000 units per month, said James Wang, an analyst with research firm Canalys.

“I think Acer has started to learn they are able to sell some expensive products,” he said.

Selling higher-end PCs could help stop the bleeding in Acer’s finances, but with the overall PC market still shrinking it’s unlikely to help it expand in any meaningful way. “You can’t really expect vendors in desktops and notebooks to find growth,” Wang said. “You win in the market by not falling in shipments.”

Source

Is Lenovo Eyeing Blackberry?

Lenovo reportedly has joined the list of possible Blackberry buyers, with the firm reportedly having approached the struggling Canadian phone maker.

The Wall Street Journal reported that Lenovo, despite previously denying that it was mulling a Blackberry buy (paywalled), has been given the thumbs up to cast an eye over the Canadian company’s books before making it a possible offer.

If reports are to be believed, Lenovo has joined a list of possible buyers that includes Intel, Cisco, SAP, Google, Samsung and LG.

Specific details of Lenovo’s possible acquisition are yet to be revealed, but as a newcomer to the smartphone market Lenovo recently admitted that it is selling more smartphones than tablets and PCs in China, despite being one of the only PC makers to continue showing sales growth.

However, Lenovo’s smartphone portfolio is yet to appear the UK, and the firm hasn’t seen much success outside China. However, picking up Blackberry could help Lenovo enter the global smartphone market, and the firm could be looking to take over from Blackberry as a phone maker focused on business professionals.

Lenovo might have a hard time closing a buyout deal for Blackberry, though. Rumours about a takeover have already led to speculation that such a buyout would struggle to get approval from the US and Canada, due to the company’s Chinese ownership and the fact that Blackberry does business with sensitive parts of both governments.

Blackberry didn’t comment on a possible Lenovo buyout, but instead put out its usual vague statement. A company spokesperson said, “The special committee, with the assistance of Blackberry’s independent financial and legal advisors, is conducting a robust and thorough review of strategic alternatives.”

Lenovo declined to comment on the report.

Source

Lenovo Soars

PC sales in China and high growth in smartphones sales helped boost Lenovo’s net profit for its fiscal fourth quarter by 90% year-over-year.

For the quarter ended March 31, Lenovo’s net profit was $127 million, the company said on Thursday. Revenue shattered records and was at $7.8 billion, growing 4% from the same period last year.

In Lenovo’s home market of China, the company had an operating margin of 4.9%, an increase of 8% year-over-year. The company also saw continued profitability in its mobile devices business, which makes up 9% of its overall sales. At the end of the quarter, Lenovo’s smartphone shipments were up 206% year-over-year.

Globally, PC shipments were down 13.9% year-over-year in the quarter, the market’s steepest decline since research firm IDC began tracking the market in 1994. Lenovo itself posted flat year-over-year PC shipment growth in the period.

Smartphone and tablet popularity have hurt PC sales, according to analysts. Computers running Microsoft’s Windows 8 have also failed to drum up consumer interest in the previous two quarters.

Source

Lenovo, however, has managed to weather the slowdown by taking advantage of the Chinese PC market, where it has an over 30% market share. Close to half of the company’s revenue comes from the country, now the world’s largest PC market.

The company is now close to surpassing leading PC vendor HP for the top spot. The company had a 15.3% share of the market in this year’s first quarter, while HP had a 15.7% share.

But the Chinese PC maker also plans to focus more of its investment on tablets, smartphones and enterprise hardware, the company’s CEO Yang Yuanqing said in a statement. Earlier this year, Lenovo also reorganized its operations to sharpen the company’s branding and compete better in high-end products.

For the current fiscal year, Lenovo aims to ship 50 million smartphones, up from 30 million last year, Yang said Thursday in an earnings call. It aims to ship 10 million tablets, a five-fold increase from the previous fiscal year.

Most of Lenovo’s smartphone sales come from China, but the company has also begun selling handsets in the emerging markets of Russia, India, Indonesia, the Philippines and Vietnam. In addition, Lenovo is preparing to bring its smartphones to the U.S. and European markets, Yang said, without saying when.

HP Looks Beyond Windows

Hewlett-Packard has announced the availability of its latest Pavilion laptop with Google’s Chrome OS as the PC maker attempts to improve laptop sales by offering an alternative to the Windows OS.

The Pavilion 14 Chromebook has a 14-inch screen and runs on a dual-core Intel processor. The laptop is roughly 21 millimeters thick, and weighs 1.8 kilograms. It offers just over four hours of battery life, said David Conrad, director for product management at HP’s consumer products group.

The laptop is expected to ship on Monday in the U.S. starting at $329.99. The company did not immediately provide worldwide availability information.

HP wanted to widen its product offerings and the new Chromebook is targeted at those who do most of their computing on the Web, Conrad said.

“It’s really about choice. We have a very wide offering,” Conrad said. “We think the time is right for an additional choice for people to have a gateway to their Google digital lifestyle.”

The laptop has only 16GB of solid-state drive storage, but will offer 100GB of free Google Drive storage for two years.

The Chromebook has the same design as HP’s other PC offerings, which mostly run on Windows and have standard-capacity hard drives. But, with a lot of data moving to the cloud, the Chromebook provides a different usage model.

“We see this as another device to be used around the house. It’s easily managed,” Conrad said.

Source…

Lenovo Launches The IdeaPad

Although it was introduced six months ago at CES, Lenovo’s new IdeaTab has finally showed up at Lenovo’s site with a pretty decent price around $343.20. The IdeaPad comes with a 10.1-inch screen, Qualcomm’s dual-core Snapdragon S4 CPU, Android 4.0 ICS and optional keyboard dock, it certainly sounds like a good deal.

The specification list for the Ideatab S2110 kicks off with a 10.1-inch IPS 1280×800 display, Qualcomm’s 1.5GHz dual-core Snapdragon S4 CPU, 1GB of RAM and Android 4.0 ICS OS. The rest of the specs include back 5MP and front 1.3MP cameras, 802.11bgn WiFi, Bluetooth 4.0, and a battery capable of up to 9-10 hours of WiFi web browsing, according to Lenovo.

Same as the Asus Transformer line of tablets, Lenovo’s Ideatab S2110 also features an optional keyboard dock that gives you an extra ten hours of battery life and adds two USB ports and a card reader.

Source…