Heads to roll at Lenovo amid 'severe downturn' in PC sales
- Reference: 1676637725
- News link: https://www.theregister.co.uk/2023/02/17/lenovo_q3/
- Source link:
At a group level, revenue for [1]Q3 of Lenovo's fiscal 2023 [PDF] ended 3 December was $15.26 billion, down 24 percent year-on-year, and net profit was down a whopping 32 percent to $437 million.
The "operating performance was impacted by subdued demand in the PC sector, stemming from persistent macro headwinds including rising interest rates," the company said today.
[2]
The Intelligent Devices Group (IDG) – PCs, smart devices and the mobile biz – reported turnover of $11.585 billion, down from $17.609 billion. That's a 34.2 percent drop. Operating profit for the division – the only one available – showed a 35 percent fall to $878 million.
[3]
[4]
"The smart devices market is in its worst period," CEO Yang Yuanqing said on a webcast, adding that the PC and mobile businesses were suffering from a "severe downturn."
Lockdown liftoff leads to tech dip
PCs became the interface that allowed people to work, to play, to communicate and to learn during pandemic-induced lockdowns. The industry couldn't make enough products to sate demand and shipments reached 350 million units in 2021. Sales started to fall last year and [5]finished 2022 on 286.2 million , still way above pre-pandemic levels.
Now companies including Lenovo HP and Dell are facing an uphill battle to sell more product.
[6]Dell planning job cuts as PC demand jumps off a cliff
[7]As Apple sales slide, Tim Cook says fanbois will tolerate higher iPhone prices
[8]Sweating the assets: Techies hold onto PCs, phones for longer than ever
[9]Intel cuts some workers' pay to fund its future
With a huge reliance on IDG, Lenovo said its medium-term financial priority is all about trying to improve profit, and so it's looking to reduce overheads. On the same conference call today, chief finance bod Wong Wai Ming said the company needs to remove $150 million in costs, which would double the net margin.
"This includes overall reduction in operational spending as well as workforce adjustments where necessary and appropriate," he said. Lenovo has not indicated how many roles will be at risk. It employs 75,000 people.
[10]
Farewell to an industry icon
The Reg was sad to hear of the passing for former Lenovo President Gianfranco Lanci, who only retired from the vendor last year to manage his vineyards in Italy. Lanci previously worked at both Texas Instruments and Acer. He died from complications following back surgery, and leaves behind a wife and three children. RIP.
Lenovo said it reduced advertising and promotional expenses by $92 million in Q3.
Gartner has already [11]written off any prospects for growth in the devices market in 2023. Last month it forecast a year-on-year 4.4 percent decline in PCs, tablets and smartphones for 1.74 billion units. It expects things to improve after that, with refresh cycles coming on stronger.
Lenovo has worked hard to diversify its business, buying up [12]IBM's x86 server business and packaging managed services that can be resold by a legion of resellers that promote the company's wares.
[13]
The Infrastructure Solutions Group – servers, etc – grew to $2.85 billion from $1.928 billion, and the Solutions and Services Group climbed to $1.836 billion from $1.497 billion. ®
Get our [14]Tech Resources
[1] https://doc.irasia.com/listco/hk/lenovo/interim/2023/int3q.pdf
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y@@yssZpcPKClMGHKgMhOQAAAM0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y@@yssZpcPKClMGHKgMhOQAAAM0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y@@yssZpcPKClMGHKgMhOQAAAM0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/01/11/pc_sales_slump_to_prepandemic/
[6] https://www.theregister.com/2023/02/06/dell_job_cuts/
[7] https://www.theregister.com/2023/02/03/apple_q1_2023/
[8] https://www.theregister.com/2023/01/31/gartner_pc_shipment_forecast/
[9] https://www.theregister.com/2023/02/01/intel_pay_cuts/
[10] https://regmedia.co.uk/2010/05/27/lanci_1.jpg
[11] https://www.theregister.com/2023/01/31/gartner_pc_shipment_forecast/
[12] https://www.theregister.com/2014/09/29/lenovo_ibm_server_deal_to_close_october/
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y@@yssZpcPKClMGHKgMhOQAAAM0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[14] https://whitepapers.theregister.com/
Re: Perceptiveness
You're basically right: notebooks have seen little innovation over the last five years. Screens have gone hi-res, batteries a bit bigger, weight a little less. The M1 isn't really a workhorse like beefy AMD and Intel chips are but later releases have got better in this respect. But Apple wins outright on battery usage and the PC market will have to wait for Microsoft to get its arse ARM in gear.
Re: Perceptiveness
The M1 isn't really a workhorse like beefy AMD and Intel chips
That depends - M1 Max beats anything I have used so far, including "beefy" AMD and Intel chips.
For instance when running a test suite - on my i9 laptop, I had to wait 15 minutes for it to complete and system was very much unusable throughout that time, not to mention the fan noise.
With M1 it finishes under 2 minutes and while the fans engage towards the end, I can't hear them and machine is responsive and I can do other tasks in the meantime.
It's completely next level in every aspect.
Re: Perceptiveness
Suddenly it's an M1 Max you're talking about? Doesn't matter, this tells us more about your test suite than anything else. I have a Mac and I love ARM chips but the M1 is not really next level when it comes to CPU design, rather a very wll put together package.
Re: Perceptiveness
My main workhorse is a T460 from 2016. Going strong. I have a T450 for a front room, X240 in another along with a couple of spares (2 x x240 and x230)
Only thing making me think of upgrading is the misses who is now used to touch screen via work and bemoans each time she uses the front room T450 or X240.
Looking there have been 7/8 generations of Lenovo laptop for the T family since, and I doubt if much has improved for what my typical usage is.
(only got a T460 as a T450 really did die and I needed another laptop that could dock, the T470 that I was looking at, could not use the docking station which made the T460 the one I had to get)
" the industry faces weakening demand for personal computers "
I wonder how much this results from Windows 11.
"Now companies including Lenovo, HP and Dell are facing an uphill battle to sell more product"
Well gosh, what a surprise.
I wonder if all the unforcasted units sold during COVID lockdowns might have an effect.
As in, now everybody has a PC / laptop or equivalent, even those who thought they didn't need one.
You ever seen someone going to a restaurant after having just eaten ? I haven't.
Cut the marketing budget ? Yeah, that's good. Nobody's buying because everyone is equipped.
Come back in a few years. You'll be useful by then.
Right now, you can hibernate. But stop whinging. You've had your buttered bread.
Re: "Now companies including Lenovo, HP and Dell are facing an uphill battle to sell more product"
Right now, you can hibernate.
Can you? Most laptops have this feature broken...
Ever opened your bag only to see laptop whizzing and crying for help while being hot like a lava, when you thought it hibernated?
Renewal are due about now
Most of the customers I deal with replace their kit when the warranty expires. The pandemic panic purchases are, in most cases, about to fall out of their standard 3 year on-site warranty period over the next year, starting about now. At least some have told me they won't be doing the usual full-on replacement cycle though. They'll spread out the purchases and replace as kit fails. They won't be paying for out of warranty repairs. Depending on the customer and their in-house IT peoples time and skills, they may swap some bits about to make working laptops, most probably won't unless it's something simple like battery or SSD.
Re: Renewal are due about now
Our replacement cycle has been largely driven by accounting rules but we're moving to five year replacement cycles. Repairs have become almost impossible. Waiting for over six months for a new display for a Lenovo.
Re: Renewal are due about now
>Repairs have become almost impossible.
Even with a 4 year premium all risks onsite keep your HDD service contract...
Got one L15 where the USB-C port no longer reliably accepts charge, discovered the USB-C port is directly mounted on the motherboard rather than an easier to replace daughter board...
Quality downturn
Have to say that, following 20 years of buying IBM ThinkPads then Lenovo kit of various sorts, usually updating on a three-year cycle, the last two or three systems have disappointed. Cost-cutting shows. Creaky hinges, display backs that fall off or aren't very secure andhinges that fail have all happened over time. It's not even as if the machines had a hard life, certainly not in the last five or six years.
Took me too long to switch vendors: six months ago I bought a 17-inch LG Gram and couldn't be happier with its rock-solid performance and reliability. I can't see me returning to Lenovo.
One word...
Saturation
Perceptiveness
I wonder if they noticed that the CPUs they stuff in the machines have been very much the same for years?
Just add a core here or tweak the freq there.
Year on year basically the same laptops.
I have one that's been released in 2018 and it is basically as good as if I bought a new one today for what I am using it.
I paid for it less than £100.
Lenovo needs to wake up. If they don't come up with something better than M1, they are going to flop.
Neither Intel nor AMD have CPU on offer that could match M1 in laptop type of device.