A government agency has just released data showing that mobile Internet users in China have passed traditional desktop users for the first time, posing an interesting challenge for all players that have typically designed their products for people who surf the web from fixed-line PCs at home and in Internet cafes. This move reminds me of a similar shift to mobile from desktop computing now taking place worldwide that is dealing a blow to former PC giants Intel (Nasdaq: INTC) and Microsoft (Nasdaq: MSFT), which have long dominated the desktop computing arena but are having trouble in the mobile space.
Tag Archives: Intel
Lenovo Results: Honeymoon Nearing an End? 联想并购後的蜜月期何时结束？
Lenovo (HKEx: 992), arguably China’s best known consumer brand, has just released its latest quarterly results that show strong growth but lack any real excitement, as new acquisitions contribute to its top line for the first time. (company announcement) My real concern in all this is that the company could well be in a honeymoon period at this point, enjoying the immediate gains of higher revenue and profits from 2 big acquisitions last year, even as those same 2 acquisitions in the difficult Japanese and German markets are sure to start causing problems soon. On the surface at least, the results look quite solid. Revenue for the latest fiscal quarter rose 44 percent to $8.37 billion, while profit rose an even stronger 54 percent to $153 million, as the company gained sales from its new joint venture with Japan’s NEC (Tokyo: 6701) and its acquisition of Germany’s Medion. Investors didn’t seem too excited by the results, bidding up Lenovo shares slightly in morning trade in Hong Kong after the figures came out. The lack of excitement owes to the fact that Lenovo hasn’t been particularly aggressive in smartphones or tablet PCs, 2 of the big growth areas it will need to develop if it wants to remain a relevant PC leader for the years ahead. It did take an interesting move on that front last month, when it announced it would be one of the first backers for a new smartphone chip being developed by Intel (Nasdaq: INTC), the global giant better known for its PC-based chips. (previous post) Still, new models using the chip are probably still at least several months away, and will undoubtedly have many minor problems before they become a major contributor, if ever. Meantime, Lenovo has quite a few potential clouds hanging over its head that could turn into real trouble for the company. One of the latest of those emerged over the past week, when rival Acer (Taipei: 2353) filed a suit against one of its former top executives, Gianfranco Lanci, who recently moved to Lenovo to head its European operations. (Chinese article) But more worrisome in my view are the potential for problems with both the NEC and Medion acquisitions. Lenovo said last year it was considering moving some production to Japan, in a move clearly aimed at placating NEC’s Japanese customers worried about receiving inferior product after the deal. Meantime, the company will also probably be forced to maintain some production in German after buying Medion. Both of these labor markets are famously difficult even for the most experienced companies, and Lenovo could soon discover it has taken on a bigger challenge in both than it originally thought. On the whole, I would say to look for 1 and perhaps even 2 more quarters of positive results before the new reality starts to take effect and Lenovo enters its next period of crisis, probably by the end of the year.
Bottom line: Lenovo’s latest results show the company is still enjoying a honeymoon period from 2 recent acquisitions, but those same purchases will lead to new troubles by the end of this year.
Related postings 相关文章:
◙ Lenovo: Finally a Risk Taker In Intel Tie-Up 联想联手英特尔,终於肯冒险
◙ Lenovo Starts Year With New Europe Chief, TV Tie-Up 联想新年新气象：聘用新高管并推互联网电视
Lenovo: Finally a Risk Taker In Intel Tie-Up 联想联手英特尔,终於肯冒险
I have to applaud Chinese PC maker Lenovo (HKEx: 992) for its decision to be one of the first backers for a new smartphone chip developed by Intel (Nasdaq: INTC), not so much because I believe this new product will succeed but more because it shows Lenovo is finally starting to shed its image as a follower and take some intelligent risks. This is exactly the kind of thing the company needs to do more if it wants to become a true global leader, even though such risks are likely to produce some big failures, and this one is no exception. Let’s look more closely at this move, which Lenovo announced at the massive Consumer Electronics Show this week in Las Vegas. Lenovo, along with Motorola Mobility (NYSE: MMI), announced they will be the first partners to use a new chip that Intel has developed for smartphones and tablet PCs that are stealing share from the chipmaker’s traditional PC business. (English article) The current smartphone market is dominated by chipmaker ARM (London: ARM), working with companies like Qualcomm (Nasdaq: QCOM) and Broadcom (Nasdaq: BRCM). Intel has never been able to break into the market, but realizes it must do so or risk watching its PC chip business shrivel as more people use tablets and smartphones for their computing. Lenovo, which already makes smartphones but hasn’t found much success in the area, is taking what looks like a smart risk here by signing up as one of the first customers for Intel’s new chip. By making this move, it will immediately have access to Intel’s huge resources to help it develop new smartphones that could differentiate themselves in areas like computing speed and energy consumption from similar ARM-based products. And as one of Intel’s first customers, it will also receive goodwill from the US chip giant that it can use for future collaboration. On the downside, Intel has a spotty record for developing chips outside is core PC business, and in this case it is already far behind existing products. I would ultimately give this initiative less than a 50 percent chance of success, but still must congratulate Lenovo for trying to shed its image as follower and finally become a leader in new product development.
Bottom line: Lenovo’s new smartphone partnership with Intel is likely to fail in the long run, but still reflects the company’s aim to become a leader in new product development.
Related postings 相关文章:
◙ Lenovo Starts Year With New Europe Chief, TV Tie-Up 联想新年新气象：聘用新高管并推互联网电视
UPS Puts Chengdu on the Global Map
The interior city of Chengdu looks to be the next rising star on China’s tech map, receiving a major nod of recognition from global express delivery leader UPS (NYSE: UPS), which is adding the capital city of Sichuan province to its global express delivery map. (company announcement) UPS cites broader demand 
from that part of China, which has also seen neighboring cities like Xian and Chongqing grow quickly as China offers strong incentives for companies to set up shop in its relatively underdeveloped western interior. As a longtime tech writer, I’ve been particularly impressed with Chengdu, which seems to have a strong ability to attract some of the world’s top-tier technology names to the city with its abundance of college graduates, good transport networks and of course its tasty Sichuan food. Intel (Nasdaq: INTC) was one of the earliest players in the city when it set up a chip manufacturing plant there seven years ago, and Texas Instruments (NYSE: TXN) opened up shop in the city last year when it took over a plant from SMIC (HKEx: 981; NYSE: SMI). Most major PC players have also opened plants there in the last 2-3 years, including both Hewlett Packard (NYSE: HPQ) and Dell (Nasdaq: DELL), (previous post) along with Taiwanese contract manufacturer Hon Hai (Taipei: 2317). From an investor perspective, I wouldn’t be at all surprised to start seeing some interesting and dynamic tech firms coming out of this city, which offers not only a strong technology ecosystem, but also low costs and strong links to the rest of the world, which just got a little stronger with the addition of the city to UPS’ global map.
Bottom line: Look for interesting tech plays to emerge from Chengdu in the next few years, boosted by strong support from global players like Intel and logistics leader UPS.
Related postings 相关文章:
◙ Intel’s Move Nods to China Gadget Clout, Smells Slightly of Desperation 英特尔人事调动突显中国市场影响力
◙ Acer and Dell: One Cuts, One Pastes 宏基裁人、戴尔建厂
◙ Diageo’s China Baijiu Bid: Aiming for the Middle 帝亚吉欧瞄准中国中档白酒市场
