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BLOG: Enter the PC+ era

Jessie Quek | Jan. 18, 2013
Lenovo’s perspectives on a few key trends that will shape the PC+ era in 2013 and beyond

From phablets to bigger all-in-one touch screens, consumers can't get enough of touch and want more "real estate" to do serious damage. Bigger screens will also see PCs evolving from personal computing devices to enable shared computing experiences for multiple users at the same time.

Vertical integration in the PC industry will intensify in 2013

The increasingly VUCA (volatile, uncertain, complex and ambiguous) environment today causes disruptions across the supply chain, drives up production costs, impedes a manufacturer's ability to deliver a product quickly to market, and affects final product quality.

To tackle this, the PC industry will intensify its adoption of vertical integration - a style of management control in which vertically integrated companies up and down the supply chain are unified through a common owner. Contrary to horizontal integration, which is a consolidation of many firms that handle the same part of the production process, vertical integration is typified by one company engaged in different parts of production (e.g. growing raw materials, research and development, manufacturing, transporting).

Lenovo's end-to-end business model for vertical integration leverages owned manufacturing capabilities for greater control over both product development and supply chain operations. This model is currently unique among major PC makers and enables Lenovo to efficiently drive innovation and sharpen product differentiation as a significant and sustainable source of competitive advantage.

Lenovo recently announced a new US manufacturing facility in Whitsett, North Carolina as well as a Wuhan Industrial Base, an investment of around RMB5 billion (approximately US$800 million) over the next few years and the JV with Compal, which illustrate how its approach to vertical integration takes shape.

Aside from the above, some other trends that we can look forward to include:

  • There will be more worldwide brands coming from China. For example, Gartner already predicts that by end of 2014, three of the top five mobile handset vendors will be Chinese.
  • In the past, consumer technology purchases were driven by EMOTIONAL brand purchasing. Going forward, technology purchases will be driven more and more by RATIONAL brand purchasing.
  • Consumers will demand devices more closely linked to attached services, sometimes even across ecosystems.
  • Mobile devices will continue to shape the technology landscape and drive innovation.

We believe that Lenovo is well positioned to leverage on the trends discussed above and maintain the company's healthy growth trajectory in the coming year.  Our successful "protect and attack" strategy and innovative products put us in good stead to lead the PC+ Era. We are confident that the year ahead will be another exciting one, and look forward to it with keen anticipation.

Jessie Quek is Country General Manager, Lenovo Singapore.

 

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