Lenovo bets on happy family get-togethers
Source: Bloomberg News |
January 11, 2013, Friday
|
Print Edition
Print Edition
LENOVO CEO Yang Yuanqing is betting he?ll find customers willing to pay US$1,699 to roll electronic dice and play digital Monopoly on a touch screen for four. Analysts aren't yet convinced.
The Horizon Table PC, a 27-inch touch-screen panel that enables multiple users to play games was unveiled by Lenovo this week. It will find a market with families looking for ways to rejoin members disconnected by individual devices, Yang said at the annual International Consumer Electronics Show in Las Vegas.
Yang built the Chinese company into the world's largest personal-computer maker last year, overtaking Hewlett-Packard in shipments.
Now he's looking to expand the dominance into new areas from smartphones and tablets to family entertainment. Even after passing HP and overtaking Apple as the second-largest smartphone vendor in China, Yang has yet to convince analysts, including Jonathan Ng, that he'll triumph over Microsoft and Nintendo in the living room.
New product lines
"Lenovo is relatively new and faces some stiff competition," said Ng, a Singapore-based analyst at CIMB-GK, who rates the shares outperform. "Families who enjoy games together are likely to stick to game consoles such as Xbox and Wii."
Yang needs new product lines to keep profit growing. The company's net income may gain 24 percent in the year ending March 31 and 23 percent next fiscal year, according to the average of 18 analyst estimates compiled by Bloomberg News. Lenovo's profit surged 73 percent last fiscal year.
The Horizon is a coffee-table sized device that allows two or more people to use the screen at the same time, supporting 10-finger touch, according to Lenovo.
It comes with a set of accessories including e-dice and four joysticks and uses Microsoft's Windows 8 system to run games from developers such as Electronic Arts and Ubisoft, including "a modern take on the classic Monopoly" board game, Lenovo said.
The Horizon was inspired by a Chinese saying that states "when you're together long enough, you want to separate. When you are separated long enough, you want to be together," Yang said.
This saying drove Lenovo to think differently about family entertainment systems, he said.
When everyone uses their individual devices, people become less connected, Yang said.
"We believe people would like to reunite. Many older men in China are not happy with the current situation when their family sits together to have dinner and everybody just plays by themselves with their smartphone and tablet."
One barrier to wide adoption of the device will be the price, said Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong, who rates the shares sell.
"This is an interesting and innovative product, but end-demand will be limited at this point in time," he said. "The price will remain relatively high as the specs will need to be strong to support the processing power needed for the touch screen, graphics and leading-edge central processing unit."
Yang's living-room push comes on the back of rapid expansion in the smartphone market.
Lenovo overtook Apple during the second quarter last year for second place in smartphone sales in China, the world's largest handset market.
The company, which only introduced its first touch-screen handset in China in 2010, vaulted from seventh place in the first quarter. In the past six months, Lenovo has expanded sales beyond its home market to Russia, India, Indonesia, Vietnam and the Philippines.
The company, which acquired IBM's personal-computer unit in 2005, accounted for 15.7 percent of global PC shipments in the third quarter, overtaking HP's 15.5 percent, market-research firm Gartner said in October.
Lenovo shares gained 36 percent in Hong Kong last year, outpacing the 23 percent advance in the benchmark Hang Seng Index.
The Horizon Table PC, a 27-inch touch-screen panel that enables multiple users to play games was unveiled by Lenovo this week. It will find a market with families looking for ways to rejoin members disconnected by individual devices, Yang said at the annual International Consumer Electronics Show in Las Vegas.
Yang built the Chinese company into the world's largest personal-computer maker last year, overtaking Hewlett-Packard in shipments.
Now he's looking to expand the dominance into new areas from smartphones and tablets to family entertainment. Even after passing HP and overtaking Apple as the second-largest smartphone vendor in China, Yang has yet to convince analysts, including Jonathan Ng, that he'll triumph over Microsoft and Nintendo in the living room.
New product lines
"Lenovo is relatively new and faces some stiff competition," said Ng, a Singapore-based analyst at CIMB-GK, who rates the shares outperform. "Families who enjoy games together are likely to stick to game consoles such as Xbox and Wii."
Yang needs new product lines to keep profit growing. The company's net income may gain 24 percent in the year ending March 31 and 23 percent next fiscal year, according to the average of 18 analyst estimates compiled by Bloomberg News. Lenovo's profit surged 73 percent last fiscal year.
The Horizon is a coffee-table sized device that allows two or more people to use the screen at the same time, supporting 10-finger touch, according to Lenovo.
It comes with a set of accessories including e-dice and four joysticks and uses Microsoft's Windows 8 system to run games from developers such as Electronic Arts and Ubisoft, including "a modern take on the classic Monopoly" board game, Lenovo said.
The Horizon was inspired by a Chinese saying that states "when you're together long enough, you want to separate. When you are separated long enough, you want to be together," Yang said.
This saying drove Lenovo to think differently about family entertainment systems, he said.
When everyone uses their individual devices, people become less connected, Yang said.
"We believe people would like to reunite. Many older men in China are not happy with the current situation when their family sits together to have dinner and everybody just plays by themselves with their smartphone and tablet."
One barrier to wide adoption of the device will be the price, said Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong, who rates the shares sell.
"This is an interesting and innovative product, but end-demand will be limited at this point in time," he said. "The price will remain relatively high as the specs will need to be strong to support the processing power needed for the touch screen, graphics and leading-edge central processing unit."
Yang's living-room push comes on the back of rapid expansion in the smartphone market.
Lenovo overtook Apple during the second quarter last year for second place in smartphone sales in China, the world's largest handset market.
The company, which only introduced its first touch-screen handset in China in 2010, vaulted from seventh place in the first quarter. In the past six months, Lenovo has expanded sales beyond its home market to Russia, India, Indonesia, Vietnam and the Philippines.
The company, which acquired IBM's personal-computer unit in 2005, accounted for 15.7 percent of global PC shipments in the third quarter, overtaking HP's 15.5 percent, market-research firm Gartner said in October.
Lenovo shares gained 36 percent in Hong Kong last year, outpacing the 23 percent advance in the benchmark Hang Seng Index.
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