Lenovo to introduce 2 tablets

The company shows big sales gains and hopes for further success with consumer, business devices.

Staff WriterMay 27, 2011 

  • $4.88 billion Total Lenovo sales for fourth quarter, up 13 percent from a year ago

    $42 million Net income for the quarter, up from $13 million

    $21.59 billion Revenue for fiscal year that ended in March, up 30 percent

    $273 million Net income for the year

PC maker Lenovo is hoping to build on its sales momentum by introducing two tablet devices this summer in the United States - one aimed at consumers and the other aimed at businesses.

The business model would be an industrial-strength device compatible with the software that corporations already use, Rory Read, president and chief operating officer, said in a phone interview from China. Lenovo is a Chinese company that has a headquarters in Morrisville and is one of the Triangle's largest technology employers.

"We spent a lot of time with the CIOs (chief information officers) at our key customers" learning what they want in a tablet, Read said.

Apple currently dominates the tablet market, but industry analyst Rob Enderle of the Enderle group was impressed by Lenovo's working prototype.

"It's the best attempt so far to come up with a true alternatives to the iPad for businesses," Enderle said.

Lenovo will face stiff competition in the tablet market. Most people think iPad when they think tablet. In addition, PC makers have been rushing into the market in the hope of positioning themselves as the key non-Apple alternative.

Worldwide tablet sales totaled 10.1 million in the fourth quarter of last year, double the 4.5 million shipped in the third quarter, according to market research firm IDC.

Lenovo introduced its LePad tablet in China this year. CEO Yang Yuanqing told reporters Thursday that demand for that product is outstripping supply, according to Bloomberg News.

The No. 4 PC maker on Thursday outlined its plans to introduce tablets in the U.S. and elsewhere in conjunction with the release of market-defying quarterly results. The company didn't disclose the tablets' prices

Lenovo's sales for its fiscal fourth quarter that ended in March jumped 13 percent and its profit was triple that of a year ago - ahead of analysts' estimates.

Its PC shipments jumped 16 percent in the quarter even as the industry experienced a 1.1 percent decline in shipments. Shipments in North America rose 25 percent.

For the entire fiscal year, Lenovo's revenue rose 30 percent.

"We have ... the right products and great momentum," Read said "We are well-positioned for the future."

Read said the company's U.S. tablets won't be sold under the LePad name.

Indeed, Lenovo's tablet aimed at the business market will be sold under the popular ThinkPad brand, which Lenovo acquired when it purchased IBM's PC business in 2005. Lenovo's strength in this country is selling PCs to corporations, although it's also gaining ground in the consumer market.

Its consumer tablet will be sold under Lenovo's Idea brand.

Lenovo's consumer tablet is scheduled to be available in "early summer," while the tablet aimed at businesses is expected to be brought to market before the summer is over.

Lenovo also began marketing a smartphone in China last year but isn't ready to say when it will compete in the U.S. smartphone market.

Given that the U.S. market is highly competitive, Lenovo wants to scale up its production volumes in China - thus lowering its cost per unit - before it introduces a smartphone here, Read said.

Lenovo employs about 1,800 people in Morrisville who work in administration, sales and marketing, product design and other functions. The company has added 250 workers to its Morrisville workforce in the past two years.

Lenovo announced last week that it expects to create 300 local jobs by moving its customer-support operations to the Triangle. About 50 of those workers will be Lenovo employees and the other 250 will work for Affiliated Computer Services, which Lenovo has retained to handle customer inquiries and technical support.

david.ranii@newsobserver.com or 919-829-4877

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