The phenomenon of “cutting orders” is breaking out in many fields of the consumer electronics industry and continues to spread to the supply chain.
On April 11, it was reported that in addition to mobile phone enterprises, many PC manufacturers have also revised or planned to revise the annual shipment target in the next year. Recently, Morgan Stanley and other institutions have lowered the target price and shipment expectations of HP and Dell. Industry insiders predict that PC sales will decline by 6% year-on-year in 2022.
On the same day, PC giant Lenovo released a report card for the first three fiscal quarters: Lenovo’s turnover and profit in China increased by 36% and 54% respectively, of which the PC business, which accounts for nearly 80% of the total revenue, achieved high growth for four consecutive years, with a market share of 43.7%.
In the face of the spread of “cutting orders” and organizations’ bearish outlook on the PC market, can Lenovo, the “first brother” of PC, continue to grow?
pc giant’s average shipment volume decreased by 10% to 15%
After Apple reduced its shipping target, an Android mobile phone brand in China was also exposed by industry analysts. It has cut about 170 million orders this year, accounting for 20% of the original shipping plan in 2022. However, this is not over. Now the PC industry may also face the problem of cutting orders.
According to a supply chain source, front-line PC manufacturers such as Lenovo, HP, Acer and ASUS are reducing their orders this year by about double-digit percentage. In the second quarter, the brand factory began to inform the suppliers to revise the annual shipment target.
Some international institutions such as Morgan Stanley and Barclays also lowered the shipment expectations of HP and Dell, and even Goldman Sachs analysts removed Dell from the list of confidence. Trendforce also said that in the first half of 2022, laptops will be shrouded in correction pressure, and the shipment forecast will be revised from the original annual shipment of 238 million units to 225 million units, a decrease of 8.5%. The downward revision of notebook brands’ outlook for shipments in 2022 is about 10% to 15% lower than that at the beginning of the year.
The reporter contacted HP in this regard. Relevant people in China said that the shipment volume of some models of PC will be adjusted according to the market situation, and the expected range is about 10%, but how to adjust it needs further attention.
The relevant person in charge of Lenovo’s China market told the Securities Daily: “the phenomenon of ‘cutting orders’ has indeed appeared in the PC market, but it has little impact on Lenovo. Lenovo is adjusting the structure of PC business, increasing the proportion of business models with greater market demand, and there will be no major fluctuations in prices.”
Citic Securities Company Limited(600030) said, “in 2022, Lenovo’s commercial PC demand is expected to remain strong and offset the decline in personal PC demand to a large extent”.
It is understood that not all PC manufacturers are facing the pressure of cutting orders. Due to the stable demand of Dell and apple in the commercial and enterprise markets, the order adjustment is relatively small.
\u3000\u3000 “Affected by multiple factors such as the changeable international market environment and supply chain constraints, PC manufacturers mostly experienced a surge in overstocked inventory in the first quarter of this year. At the same time, PC has experienced two years of high growth stimulated by the sharp increase in demand during the epidemic, and the market has gradually slowed down. It is expected that the medium and low-end PC market will enter a downturn, but the computer demand in business, games and other segments is still in the release stage. Manufacturers who layout in advance and adjust in time We can still obtain sufficient orders and will not reduce the shipment target in the short term. ” Lin Zhi, chief analyst of witdisplay, told the Securities Daily.
pc what do you rely on
Under multiple pressures, PC giants are making a new round of adjustment in business and structure.
Due to the rapid growth of smart phones and tablets, the PC market has fallen into a decade long downturn. With the growth of market demand driven by the epidemic, the PC market will enter the stage of comprehensive recovery in 2020 and achieve high growth in several quarters. IDC said that China’s PC market grew by 10.7% in 2021.
However, it is generally believed in the industry that the current problems such as component shortage and logistics supply in the PC market still exist, and the growth of the traditional PC market has slowed down, or even entered a recession. According to Gartner, global PC shipments fell 5% year-on-year in the fourth quarter of 2021, the first decline in the market after six consecutive quarters of growth. Nyingchi predicts that the sales volume of notebook computers in PC market may decline by 9% in 2022.
Global PC manufacturers are also aware of the instability of the PC market and are experiencing a round of transformation. HP and Dell reduced their dependence on PC business and transformed to higher profit areas such as servers and memory. Lenovo has also experienced many adjustments and determined to transform to intelligence. China is regarded by Lenovo as the main force of this round of model change and transformation.
On April 11, Liu Jun, executive vice president of Lenovo Group and President of China, said that Lenovo China has entered a transition period of “science and technology enabled China’s intellectualization” at this stage. He said that Lenovo China has developed the second curve of business growth since 2017, that is, 3S new business including intelligent products, intelligent infrastructure and intelligent services, and has been transformed into a solution and service provider.
The current business composition of Lenovo China has also changed greatly. Although PC is the largest, its proportion has gradually decreased, and the scale of emerging businesses has increased rapidly. Liu Jun revealed that by the Q3 quarter of fiscal year 2021, Lenovo’s 3S transformation new business in China accounted for more than 1 / 4 of its total revenue, an increase of 46% year-on-year. In fiscal year 2022, 3S business revenue is expected to account for more than 30%.
Specifically, the SD turnover of its intelligent products increased by 98% year-on-year; The turnover of intelligent infrastructure Si increased by 31% year-on-year; The revenue of smart service SS increased by 46% year-on-year.
“Lenovo China, led by Liu Jun, is the core area of Lenovo Group’s transformation and upgrading, which is related to the success or failure of this transformation. At present, Lenovo has found the second growth curve with intelligent services as the core. As for the intelligent hardware business represented by PC, it has soared with high growth rate and record share in the context of the epidemic, winning more transformation time.” Major general Ding, founder of nail technology, said.
However, he believes that in the future, Lenovo will still face multiple challenges such as delayed resumption of factories, low rework rate of employees and restrictions on parts supply, and the reform still needs to be deepened. “Lenovo’s smart service business needs to expand into more fields to form greater performance support. The endogenous and exogenous transformation of the new it engine also needs more optimization and application implementation. Its brand value has been reconstructed in the process of reform and development, which has great opportunities and challenges. The slowdown in the growth of the PC market is the trend, and Lenovo needs to accelerate the pace of transformation, especially to build the competitiveness of smart services beyond hardware.”
