Company / division: Lenovo
★ Lenovo Reports March Quarter Earnings (May 25, 2017)
Though Google spent much of its I/O keynote talking about apps and features like Photos and the Assistant, it did devote a few minutes to the topic of AR and VR, which will have a second deeper-dive keynote of their own tomorrow. On the VR side, the key announcement is that Google is extending the Daydream platform beyond mobile VR to standalone headsets, which in the first instance will be built by partners Lenovo and HTC and supported with chips from Qualcomm. Daydream so far has been limited by the fact that the biggest Android smartphone vendor has its own competing platform, so the news that Samsung’s Galaxy S8 phones will support Daydream through a software update in the summer is a big deal. My guess is that Samsung will still favor its own Gear VR system with its usual bundling and discounting deals, but the fact that Daydream View and other compatible headsets will now work with Samsung devices should increase its appeal. Daydream’s system is better than Samsung’s in a number of ways, though the recent Gear VR update closes the gap a bit, so the playing field should be a leveled a little going forward. Also worth noting are a couple of AR announcements, including a new “Tango phone” to support Google’s indoor mapping technology, and VPS, an indoor equivalent of GPS which will enable precise directions within large stores and the like. Neither of those feels remotely mass market yet, which means Google’s AR efforts are far more marginal than the phone-based efforts from Facebook and Snapchat (and likely soon Apple too). Interestingly, VR head Clay Bavor outlined his vision for the space in a blog post today too, and it’s remarkably similar to Microsoft’s in that it envisions a continuum or spectrum that includes both VR and AR, though Bavor’s favored term is immersive computing rather than mixed reality and he’s less pejorative about the VR and AR terms everyone is already using.
Yesterday, we had IDC’s PC numbers for Q1 2017, and today we have Gartner’s. As usual, they show pretty different trends (IDC the first growth in five years, Gartner the lowest total shipments since 2007), because the companies define the market in different ways. Whereas those IDC numbers were for “traditional” PCs, these Gartner numbers include what some call “detachables” and Gartner calls “ultra mobile premiums” such as the Microsoft Surface. Interestingly, though, whereas in the past those detachable and convertible devices have led Gartner’s numbers to grow faster than IDC’s, the situation now appears to be reversed. That’s interesting, given how hot this category has been and how much it’s helped the overall PC market in the past couple of years. My guess is that the trend will go back to its previous pattern the rest of the year. The two companies do agree on some trends though: HP had a great quarter, particularly in the US, and component shortages are driving some interesting trends. However, whereas IDC saw the latter driving higher shipments in Q1 to get ahead of price increases, Gartner focuses on the downward pressure on shipments the component shortage is likely to cause in the rest of the year due to price increases. IDC and Gartner also agree that the “other” category is suffering badly as the big names consolidate share.
Traditional PC Market Was Up Slightly, Recording Its First Growth In Five Years as HP Recovered the Top Position – IDC (Apr 11, 2017)
This is an impressive rebound for the traditional PC market, which IDC had expected to continue to decline in Q1 but actually grew for the first time since 2012. One of the explanations, though is higher shipments that didn’t necessarily translate into sales, as companies locked in component inventories, so it’s not strictly speaking sales growth. However, it’s worth watching for whether this turns into a longer-term recovery for PC sales or just a temporary blip – my money is still on a long-term decline. When it comes to the individual vendors, Lenovo appears to be struggling despite a pretty decent recent history in PCs, which will further add to its woes given the collapse of its smartphone business over the last year or so. HP did very well, at least on paper, and it will be interesting to watch its next earnings release for signs of what drove the 13% growth it saw. Apple also seems to have done well, continuing the recovery it’s seen since launching new MacBook Pro models late last year. The other big story continues to be the decline of the “other” category as the top five or six vendors continue to scoop up more and more market share and growth, dooming the rest to declines much more severe than the market as a whole.
Microsoft’s cheaper mixed reality experience is similar to HoloLens, but there are limitations – Mashable (Apr 7, 2017)
When Microsoft held its Surface event back in October last year, one of the quick announcements it made towards the end was that OEMs would be producing VR headsets starting at $299. At the time, I said “Microsoft’s promotion of VR headsets from its OEM partners today is the first sign we’ve seen that Microsoft might be rethinking its focus on augmented rather than virtual reality. Given that HoloLens is likely to continue to struggle to achieve mainstream appeal, supporting a more consumer-friendly VR push by laptop makers is a smart move, although $299 PC-based VR solutions may struggle against smartphone-based versions at $100-200 which are more portable.” I still feel pretty much the same way about this, and it’s interesting that – despite the Windows Mixed Reality branding – these are basically VR rather than AR headsets. That’s a concession that VR is where the action is today, is the space at least some consumers already understand, and is frankly where all the content is today too. These new devices also reinforce the obvious compromises made when bringing price points down: the lower PC standards and cheaper hardware will make these VR headsets less powerful than either HoloLens or Oculus or HTC Vive hardware. There’s therefore an important question about whether this in-between space will gain any traction versus the cheap and basic mobile VR experiences provided by Gear VR and Daydream VR at one end and the high-end stuff being produced by HTC, Oculus, and Playstation.
Tim Cook is very fond of talking about Apple’s customer satisfaction ratings on earnings calls – he clearly believes these are both the best indicators of whether Apple is being successful and the best determinants of its future prospects. As such, reviews like this one, which focused on online and phone technical support and service for laptops across the top brands, are good news for Apple, given that it came top of the rankings. It’s also worth noting where others did and didn’t score well – Acer, Lenovo, and Microsoft took the next three spots, while Samsung came near the bottom.
I’ve changed the headline here to reflect two key points from the article: that Lenovo has done an about face and decided to re-enshrine the Motorola brand as the main brand for its phones globally, rather than de-emphasize it as previously planned; and that the company is doubling down on its Moto Mods concept, rather than abandoning it as LG has. The branding decision is a no-brainer: it always seemed odd to take an iconic brand like Motorola and retire it in favor of the Lenovo brand, which has far less (and less positive) recognition among smartphone buyers globally. The Mods decision is an interesting one – this article has one of the first numbers I’ve seen on how well they’re selling – it sounds like roughly half of Moto Z phones are bought with at least one Mod, which is actually a pretty decent attach rate (no pun intended). But Lenovo’s latest financial results say the Z is on track for just 3 million shipments in its first year, relative to Lenovo’s 51 million total smartphone shipments in 2016, so this flagship is still a tiny fraction of its total sales. And that’s a problem, because the rest of Lenovo’s sales haven’t been going nearly as well, and those that have been are very low-end focused. That’s not a great recipe for eventual profitability in smartphones, something that’s remained elusive for Lenovo since it bought Motorola.
Moto G5 + Moto G5 Plus hands-on: A little less convention, a little more action – Android Central (Feb 27, 2017)
Lenovo’s Moto G range is one of its most popular, providing a pretty nice Android experience at fairly competitive prices, and at MWC it got some nice upgrades. This part of Lenovo’s portfolio has performed much better than the rest at a time when its smartphone sales overall and in China in particular have been collapsing. Those sales have been strong in markets like Latin America, where low-cost Android is a good fit. This is yet another example of the various strategies Android OEMs will have to pursue to find workable market niches – Sony is going up market, Samsung and Huawei rely on large scale in very different segments, and Lenovo/Motorola is finding some success in this low-mid range although not elsewhere.
via Android Central
Lenovo Reports December 2016 Quarter Results (Feb 16, 2017)
Lenovo continues to be a business in three quite different parts: in PCs, it’s the world’s largest vendor, grew slightly year on year, and is profitable; while in data centers and mobile it’s shrinking fast and unprofitable. Lenovo’s mobile business in China has collapsed by about 90% in the past two years, to the point that Lenovo didn’t even report China shipments at all this quarter, while it’s likely held up a little better outside of China, though it’s very focused on low-end shipments. Lenovo basically focused its whole earnings presentation on the PC business, with much less detail than usual on mobile, and the usual short shrift for data centers. This was a business that looked really good a couple of years ago, but looks much less so now. Another cautionary tale about the challenge of today’s smartphone market, especially for Android vendors, but also about the dangers of expanding too quickly through acquisitions.
Motorola Shares Results from Moto Mod Developer Events (Feb 6, 2017)
While LG is stepping away from its modular approach, Lenovo/Motorola seems to be doubling down on its Moto Mods strategy, holding developer events to invite third parties to come up with clever ideas for add-ons to its Moto Z range. Either Motorola is seeing more traction around the concept than LG did, or it’s simply out of other ideas for how to differentiate its phones in the market. I’ve seen little evidence that the Mods (or Moto Z) are selling particularly well, so I’m skeptical that it’s the former. But it’s interesting to see Motorola take the crowdsourcing approach here, both with these developer events and its Indiegogo campaign, which runs through March.
Gartner Says 2016 Marked Fifth Consecutive Year of Worldwide PC Shipment Decline – Gartner (Jan 11, 2017)
This is Gartner’s quarterly press release on PC shipments for the end of 2016 (IDC’s equivalent release is here, with slightly different numbers, and definitions). The thrust is that the PC market continues to decline, with a 6.2% drop for the full year, and a more modest 3.7% decline in Q4 alone. But the other thing worth noting is that there’s a stark difference between the performance of the big players and the rest – the top six grew by 1.4% and the top five by 2%, but everyone but the top six collectively declined by 18.8% over the full year. The big players are mostly doing OK, but at the expense of a plethora of smaller players, and this is the shape of things to come, with the big question being the number of “big” players that will be able to sustain this performance – Asus and Acer saw declines in Q4, while Apple did better thanks to the new MacBooks.
This will arguably be the year of piling on in VR, with many companies jumping on a bandwagon led by Sony, HTC, and Oculus. Lenovo, of course, has two possible routes to VR – mobile and PC-based. This article is about a PC solution, but at a price closer to some mobile VR technology than most of the PC stuff out there today. Microsoft does seem to be getting some big names on board, though of course we’re months from seeing how these products actually perform in the wild. See also this piece from The Verge with some more details.