Lenovo is facing the turning point It is expected to touch the bottom to rebound

” Business Weekly ” publishes analyzing the article thinks, PC department of integration IBM will continue letting Lenovo Group pay a price online, cutting down the work of the cost will also sustain, but the growth rate will rise, more layoffs will make investors glad.

A part of IBM PC department purchased 2 years ago as integration, Lenovo’s president and concurrently CEO William -, Merret of A, announced on Thursday, following layoffs last year, until the whole world cut down 1400 people or account for 5% of the total number again. This layoffs are just associated once newly in a series of change gone through. Lenovo has already finished managerial great reorganization, some former IBM people’s Stephen - Ward substantially as serving as the president resigned in the second half of 2005, and Dell group headed by, Merret of A, has come to Lenovo.

Associated and also put out a series of new product in U.S.A. and attracted consumers and the small enterprise customer at the same time, improve the popularity of LENOVO brand. But up until now, Lenovo has not enjoyed global expanded success yet. The stock dropped by 25% last year, the stock drops by about 12% again this year. The market share of U.S.A. of the company has not been improved notably either, in struggle all the time in the Japanese market.

Acer’s pressure

Though will associate and send the top computer manufacturer’s ranks of the world in trade with IBM, but market share is dropping constantly. IDC released the census data of first quarter on Friday, revealed Acer has already run neck and neck with Lenovo, market share is all 6.7%. The development of Acer is more powerful, the sale of Lenovo has only increased by 17.4%, but Acer has increased by 41.4%. But, Merret of A, promises it is coming to reciprocate. Lenovo’s sale has increased in the first quarter although can not compare with Acer, average 10.9% of the growth rate that have exceeded the trade, not to mention glide 6.9% of the Dell.

In addition the intersection of layoffs and expenses pay 50 million - 60 million quarter, administration and supervision authorities think can save cost of 100 million dollars within the year. Will be there new layoffs that take action? Perhaps. But, Merret of A, claims that it should be over to shrink. He claim turning point come soon, can release, work innovative ability of product preferably combine the intersection of optimization cost and advantage the most while claiming to reduce the staff, the company can obtain the larger profit, more market share, the further enlarged reproduction increases with higher speed.

The Asian-Pacific area increases

Investors are pleased about news of reducing the staff, Lenovo’s stock goes up by 2.1% on the Hong Kong market on Friday. There is miscellaneous good news, IDC delivers the report and claims, Lenovo is in Asian-Pacific area (besides Japan) too on the same day Expanded the leading advantage in the first quarter. It is the first three li this year, the Asian-Pacific area growth rate of Lenovo reaches 24.3%, the speedup which is higher than the 17.6% of whole. Market share is up to 17.8%, 2.4 percentage points of Hewlett-Packard of the second higher. Should know because of the influence in the Spring Festival vacation, the sale in China of Lenovo drops, prove Lenovo is expanding in the advantages of other countries of the Asian-Pacific area.

The trade union negotiates

IDC analyst Kathy Sin in Hong Kong, ascribe the robust growth of the Asian-Pacific area to the efforts that Lenovo makes in making consumer’s brand. She thinks, Lenovo is aiming at the retail market, IBM ThinkPad is being just directed against the commercial market in the past, have limited the development on the consumer market. Though Lenovo has not revealed the concrete place to reduce the staff, Europe can not run away. The statement of Lenovo Company claims, will negotiate with the walking delegate of Europe immediately, discuss the issue that about raising the efficiency and adjusting the cost structure in the plan.

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