Some analysts believe that not only has the market reached maturity, but it’s hard to persuade people to upgrade. Others think that tablets are being squeezed on the one hand by larger screen size smartphones and others by low cost notebook PCs.
Some analysts believe that not only has the market reached maturity, but it’s hard to persuade people to upgrade. Others think that tablets are being squeezed on the one hand by larger screen size smartphones and others by low cost notebook PCs.
Despite a miserable year for the smartphone industry, Lenovo managed to do rather well and saw its third quarter revenue rise 31 percent to $14.1 billion.
This beat what the cocaine nose-jobs of Wall Street expected as its mobile division sales more than doubled following its acquisition of Motorola.
Lenovo wrote a cheque for $2.91 billion for Motorola, the US handset brand with a long sales history in the United States and Europe, as part of an effort to diversify away from the shrinking PC market.
These results took into account two months of Motorola’s performance and Lenovo said Motorola sold more than 10 million handsets during the quarter for the first time.
This is good news as Lenovo has been having trouble in its home market of China. Xiaomi swept aside Lenovo in China but has largely avoided Western markets due to fears of intellectual property challenges.
The company is expected to make a comeback against Xiaomi in China by adopting its rival’s Internet distribution model. Lenovo in May signed a deal with e-commerce site JD.com and announced a subsidiary last month to sell smartphones and wearables exclusively online.
Under Lenovo, Motorola will re-enter the Chinese market and be distributed primarily online, Yang said.
Total sales from the mobile division leapt 109 percent to $3.39 billion, or a quarter of the company’s sales.
Lenovo said net profit was $253 million, down from $265 million a year prior due to ballooning expenses associated with closing two major acquisitions. The Beijing-based company also acquired IBM’s low-end server unit for $2.1 billion.
The results beat expectations of $13.71 billion in revenue and $200 million in net profit.
Lenovo continued to consolidate its hold on the PC market, reaching a record 20 percent share during the quarter with sales of $9.15 billion. Shipments rose five percent compared with a three percent decline in the broader industry, with growth particularly strong in Eastern Europe.
Microsoft’s forthcoming OS Windows 10 has been praised to the skies by thinkpad maker Lenovo.
Lenovo Peter Hortensius, chief technology officer at Lenovo told PC World that customers are anxious to breathe some life into Windows 10 and his outfit was bullish and hopeful about Windows 10.
Windows 10 will succeed Windows 8.1 operating system, which has been slammed for its touch-based tablet user interface. Windows 10 will resolve many problems affecting Windows 8.1, which is a good OS but has its problems, Hortensius said.
Windows 10 will boot straight to the desktop and brings back many familiar Windows 7 features, which Microsoft hopes will please OS loyalists. It also removes program incompatibility issues plaguing Windows Phone and Windows 8 versions for Intel and ARM processors.
Analysts have said Windows 10 could spur a round of PC upgrades in businesses, which could boost PC shipments. Lenovo’s shipments have increased even as rivals like Dell and Hewlett-Packard struggled in recent years as laptop and desktop shipments slowed.
Customers are responding well to changes in Windows 10, and Microsoft is taking the right approach in developing the OS, Hortensius said.
Lenovo was positive about where the product was going and depending on customer demand, Lenovo may consider the OS for a range PCs, tablets and handsets.
“It’s up to Microsoft to make competitive offerings. If they do… we’ll gladly use it,” Hortensius said.
Despite evidence that sales of tablets showed signs of decline in 2014, one market intelligence is bucking the trend by predicting healthy sales in 2015.
ABI Research said that although 2014 was “lacklustre”, it predicted that there will be solid growth during the next five years with shipments of tablets close to 290 million units in 2019.
But the growth is not for every vendor – Amazon, Apple, Barnes & Noble and Google will show year on year falls in shipments.
On the other hand, Acer, Asus, Dell, HP, Lenovo, LG, Microsoft and Samsung are predicted to show higher volumes in 2014.
Senior analyst Jeff Orr doesn’t have good news for Apple. He said: “Historically, Apple has counted approximately 35 percent of its iPad sales in the last calendar quarter of the year. Unless Apple can pull off a 32+ million unit quarter, sales for 2014 will be down for the first year since the iPad launched.”
He said that Apple probably shipped 68 million iPads in 2014, but managed to sell 74 million in 2013.
On the operating systems front, Android has 54 percent of branded tablets, Apple iOS has fallen to 41 percent, and Windows 8 has a meagre five percent of shipments.
Emerging markets worldwide have accounted for the growth of smartphones in the third quarter of this year, growing by 20 percent.
Gartner said Samsung lost market share, but Chinese manufacturers are showing positive growth.
Altogether, sales of smartphones accounted for 301 million units shipping in the third quarter.
Roberta Cozza, research director at Gartner, said in the third quarter smartphones represented 66 percent of the total mobile phone market. She thinks that by 2018 nine out of 10 phones will be smartphones.
Western Europe saw a decline in growth of 5.2 percent, but the USA saw high growth of 18.9 percent, fuelled by the launch of the iPhone 6 and 6 Plus.
In terms of market share, Samsung holds 24.4 percent of the market, Apple holds 12.7, Huawei holds 5.3 percent, Xiaomi has 5.2 percent of the market and Lenovo five percent.
As far as operating systems are concerned, Android ruled the roost in the third quarter (83.1%), Apple was next with 12.7 percent, Windows only held three percent and Blackberry 0.8 percent.
Cozza said: “The smartphone market is more than ever in flux as more players step up their game in this space. With the ability to undercut cost and offer top specs, Chinese brands are well positioned to expand in the premium phone market too.”
A report said that increased production by major Chinese vendors will topple US players from their grip on the server market.
Digitimes said that Lenovo, Huawei and Inspur are likely to ship a total of two million units in 2015, knocking Dell off the number two slot.
Earlier this year, Lenovo bought IBM’s X86 business and that means the company is likely to ship a million server boxes in 2015.
Meanwhile HP, the market intelligence firm said, will show a decline in server shipments of 10 percent this year.
By the end of next year, the combined shipments worldwide from Chinese vendors is likely to amount to nearly 20 percent.
Meanwhile, the multinationals are threatened by ODMs (original design manufacturers) like Quanta, which are squeezing the Dells and HPs of this world by selling units direct at a knockdown price.