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chanj0
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Re: Changing of the guard
chanj0   7/11/2013 5:09:00 PM
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Lenova gains more market share, not because of making more shipment but because of keeping the shipment from falling too quick. The overall shipment in 2Q13 compared to 2Q12 has dropped by 10M. There is no doubt what a good job Lenova has been doing. Chinese firms have come a long way.


Now, the real challenge comes to Lenova. How can they keep the leadership position in PC market and, at the same time, turn itself into a more innovative and creative brand, like Apple has done?

mcgrathdylan
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Re: Changing of the guard
mcgrathdylan   7/11/2013 4:38:49 PM
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Great points. HP'll never catch Lenovo now and it would be a mistake to even try. Love the point about market share being pointless if you can't make money. So very true.


It wouldn't shock me if HP reveresed itself again and was back to wanting to get out of the PC business. And by the way, if I'm not mistaken, HP came right out and said back in 2011 it would spin out its PC business and explore its sale. And, of course, Whitman eventually reversed that decision.

http://www.eetimes.com/document.asp?doc_id=1260089

DMcCunney
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CEO
Re: Changing of the guard
DMcCunney   7/11/2013 3:41:46 PM
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I don't think HP can, and the question is whether they should try,

HP has the same problem that made IBM sell the PC operation to Lenovo and Dell go private.  The PC market is largely saturated.  New sales are few.  Existing sales are replacements and upgrades.  And PCs are commodities with commodity pricing and razor thin margins.  Many of the things that used to require a PC have shifted to tablets and smartphones.

HP under Leo Apotheker was reportedly mulling getting out o the PC business. Meg  Whitman reversed that.  But HP's challenge is to make systems with enough added value that they can get a higher price and make a better margin.  They need to move upscale, out of the commodity end of the market, and make enough money doing so to justify remaining in the market.

If they can move upscale, they may make money, but the volume is unlikely to change their market share enough to dethrone Lenovo.

If I'm HP, I'm thinking revenue and profit.  Market share is pointless if you can't make money on it.  All you get is higher losses.



DMcCunney
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CEO
Re: Mistake by IBM
DMcCunney   7/11/2013 3:33:02 PM
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If I were IBM, I wouldn't regret getting out.  They got out in the first place because they couldn't make money, and the fundamentals that made them bail haven't changed.

PCs are commodities, with commodity pricing and razor thin margins, where the lowest cost producer wins.  IBM has never been the lowest cost producer in any market.  And the PC market is largely retail, and IBM has always been a B2B supplier, and never really understood retail.  (Their attempt years back to have their own retail stores was a notable failure.)

Lenovo understands retail and can be cost competitive, so it's not a real surprise they reached the number one position.

goafrit
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Manager
Re: Mistake by IBM
goafrit   7/11/2013 3:29:44 PM
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IBM made the best decision as they have focussed on more lucrative business segment. I do not see the reason why they need to regret. The data analytics, Smart Cities,  Walton etc are future markets that could be bigger than PCs.

goafrit
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Manager
Re: Changing of the guard
goafrit   7/11/2013 3:27:22 PM
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>> I think they have a good staying power in the PC market.

A recent piece about the company in one of the leading global magazines shows that they still believe that PC has a place in the future. This is a company that is efficiently managed and can generate innovations just as their Western peers.

goafrit
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Manager
Re: Changing of the guard
goafrit   7/11/2013 3:25:56 PM
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>>  Can the company maintain this lead? Given the slowdown in China and the evidence that HP has some new systems in the pipeline, can HP get back on top?

HP does not need to get back on top. They should focus less on number shipped to margin obtained. It is like airline business. You can fill 5 seats at the economy but one business class can make all the difference. Sure, Wall Street will like that the other carried 5 people while you have one passenger. But in your books, you look better. HP may be unable to catch Levono in  volume, but they can still lbe more profitable in that sector.

goafrit
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Manager
Re: Mistake by IBM
goafrit   7/11/2013 3:23:25 PM
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Not sure if IBM sold it cheaply. The fact is that an Asian firm can live with low margin while an American firm may find that difficult

Warren3
User Rank
CEO
Re: Mistake by IBM? Nah
Warren3   7/11/2013 1:12:41 PM
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I too feel that IBM has better plans for investment and generating revenue. I also feel that the real story here is about Dell; positioning itself well for success if/when the market segment expands. Delays in getting their ownership and management plans sorted out won't help their efforts any but the numbers look good.

mcgrathdylan
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Blogger
Re: Mistake by IBM
mcgrathdylan   7/11/2013 12:07:47 PM
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I wonder if IBM would truly agree that it was a bad move. Lenovo has done very well with the business, but even so we know the margins are razor thin. We know that PC sales are on a downward trend that likely is not going to be reversed. IBM got out, and I don't know that the company has any regrets about that.

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