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Lenovo CEO Yang Yuanqing mentioned the coronavirus pandemic will enhance the entire addressable marketplace for PCs by upwards of 30 % over the subsequent few years as many companies and academic institutes make working or finding out from dwelling everlasting.
“The earn a living from home, examine at dwelling, e-commerce, on-line gaming and telehealth will change into the brand new regular and increase the entire PC and good units market dimension,” mentioned Yuanqing, throughout the firm’s fourth fiscal quarter earnings report Tuesday evening. “We’ll proceed to innovate to fulfill new demand and give attention to the high-growth segments to drive even stronger development.”
Yuanqing mentioned the surge in distant working stemming from COVID-19 will trigger many workers to “earn a living from home ceaselessly if their function permits them to do this.” He added that each business clients and households are shopping for laptops to both work or examine from dwelling.
“We see this development isn’t brief time period. So it may very well be long run. It’s going to drive the entire PC TAM (whole addressable market) to extend,” Yuanqing mentioned. “So the entire PC TAM shall be elevated by 25 to 30 % in two to 3 years — that’s very doable.”
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Resolution suppliers see cell units and laptops because the third fastest-growing expertise space within the coming quarters, in line with a current examine from IPED Consulting. The examine discovered that 45 % of answer suppliers see a constructive affect in coming quarters for gross sales of cell units and laptops, whereas 21 % see gross sales remaining unchanged, in line with IPED (which has the identical father or mother firm as CRN, The Channel Firm).
Lenovo was hit arduous by the coronavirus pandemic because it was compelled to fully shut down its manufacturing facility primarily based in Wuhan, China, which precipitated whole revenues to drop 10 % yr over yr to $10.6 billion throughout its fourth fiscal quarter, which ended March 31.
“Our PC manufacturing in China was one of many first to renew full manufacturing within the trade,” mentioned Yuanqing. Nevertheless, the closure precipitated revenues in Lenovo’s PC and Sensible Gadgets group to drop four % yr over yr in its fourth quarter, though the corporate didn’t present a gross sales determine.
Lenovo’s PC and Sensible Gadgets (SCSD) gross sales for the complete yr hit almost $40 billion in gross sales, up four % in comparison with fiscal yr 2019. The corporate’s PCSD group reported document pre-tax revenue of $2.three billion, up 18 % yr on yr, whereas pre-tax revenue margins expanded 73 foundation level to five.9 %.
Worldwide PC shipments declined 12 % to 51.6 million items throughout the first quarter of 2020 because of the coronavirus pandemic, in line with Gartner. Lenovo captured 24.four % of the worldwide PC market share by delivery 12.6 million items, adopted by Hewlett Packard with 21.5 % share, then Dell at 19.7 % share.
“The one most vital influencing issue for PC cargo decline was the coronavirus outbreak, which resulted in disruptions to each the provision and demand of PCs,” mentioned Mikako Kitagawa, analysis director at Gartner in an announcement. “Following the primary lockdown in China in late January, there was decrease PC manufacturing quantity in February that changed into logistics challenges. … As soon as coronavirus-related lockdowns expanded to different areas, there have been new, sudden pockets of PC demand for distant employees and on-line lecture rooms that PC producers couldn’t sustain with.”
Lenovo’s president and chief working officer, Gianfranco Lanci, mentioned the corporate is at the moment seeing sturdy demand for each conventional notebooks in addition to its Winbook Chromebook.
“The clear development we see is that, normally at dwelling, you’ve got one or two PCs — so it’s one to 2 PC per household at the very least within the mature market. It’s actually turning into one PC per individual and I feel that is going to final,” he mentioned. “I don’t suppose it’s going to simply final for the coronavirus affect, nevertheless it’s going to final ceaselessly.”
Lanci predicts that “a great proportion” of workers will proceed to earn a living from home post-pandemic as a result of it’s confirmed “extra environment friendly” from an organization point-of-view and likewise “higher perceived” from an worker perspective.
“What is occurring is, I feel is TAM growth once we take a look at PCs. It’s actually a development of TAM. Then it’s as much as us to ship a great expertise on PC,” he mentioned. “So speaking about demand, we see a really sturdy Q1. I feel it will proceed in Q2.”