Lenovo's CEO believes the iPad is winning in a 'niche' market

He says this b/c he sells millions of units of middle of the road hardware. But then again I would take 5 mortgages out on my house to short Lenovo if he really believes the iPad and tablets are a niche.

He leads a company that copies last year’s tech and a lower price. They lead with nothing over there.

Apple gained some pretty slick numbers after Lenovo had already showed a tablet that looks a lot like the famous iPad at CES 2010 before the first iPad was introduced. The IdeaPad U1, it has the black bezel that Apple thought they deserve a design patent for and even has a name that is a lot like the iPad, IdeaPad…. Boy isn’t it sad how the failure of a company Lenovo is actually beat the favored Apple to displaying a slate tablet two years ago? Lenovo is so stupid.

Lenovo sells hundreds of millions of computers each year which is much more than the 40 million ipads you cite. You do realize Lenovo is the #1 pc maker in China…which is a market 4x the size of the U. S. market.

Source? I would love to read rest of that articles. Those slopes are crazy!

Well iSupply and Gartner say that it ain’t so. iPad is not first, it’s the third. Coming in right behind Lenovo in unit market share at 11mil units.

http://www.isuppli.com/Home-and-Consumer-Electronics/News/Pages/Lenovo-Jumps-to-No2-PC-Rank-in-Q3,-Challenging-HP%E2%80%99s-Lead.aspx
http://www.bgr.com/2011/10/12/gartner-global-pc-shipments-jump-just-3-in-q3-2011/
http://www.apple.com/pr/library/2011/10/18Apple-Reports-Fourth-Quarter-Results.html

that’s counting ipad as a computer — it’s not. you can’t write programs for it and you can’t “compute” anything on it without approval from apple. it’s as much a computer as game consoles are.

why don’t you include xbox, play station, smart TVs, refrigerators with touchscreen, etc..

Tablets will start counting as PCs the moment someone other than Apple starts selling them in volume and not a moment sooner.

ipad isnt a computer. its a big ipod with a virtual keyboard

iOS is great, but it is not something that I could use as my sole computer.

I think you’re being shortsighted. You’re looking at iOS today and thinking that’s the way it always be. The iPad is as powerful as what the current hardware can handle. W8 ARM tablet demos have more features because they’re running on a quad-core and not a dual-core like the iPad 2. Over time the hardware will get more powerful and more features will be added from the PC.

A tablet works great in some situations, but a keyboard is needed in others.

I suggest you look at the Touchfire. It’s become less important now to have a traditional physical keyboard.

You think small netbooks (i.e. what the Transformer is in docked form) are the future? Keep in mind that Jobs has set the iPad against the netbook and the compromised netbook format is dying. Or do you think that people don’t want easy to hold and manipulate 10 inch tablets, but are actually waiting for giant 13.3 inch tablets, like IBM’s product?

It has to be one or the other.

Personally while I am a geek, I live in the real world. And in the real world, there is only the iPad, Fire, and Nook Tablet. And the iPad is still the most popular, wanted, and bought of the three, regardless of price (just like the $200 iPhone 4s is selling more than the third placed iPhone 3GS, the consumer seems to know the value of quality over free).

Every successful tablet outside the iPad is a niche. Some are highly successful niches like the Fire, which requires you to be a dedicated Amazon content consumer willing to spend another $79 a year to get the most use out of it and practically useless outside of that. Or the Nook Tablet, great for book readers (saw an old guy in B&N who had it explained to him and ended up buying one) who simply want a cheap, easy to use tablet for their very few needs (reading, browsing, maybe Hulu and Netlix). Or all those high cost Android tablets, which are for the niche which hates Apple and who want (not need) SD cards and 0ther hardware made useless by the cloud.

Just like with the iPod when there were those who wanted other mp3 players for .ogg support and better sound quality and UMS. And some companies did make a successful business in fulfilling this niche, as long as they recognized that it was a niche (Cowon and Archos as opposed to Microsoft).

Remember how important UMS was to geeks like me (Cowon and Meizu were my choice)? That’s how these niche tablet buyers view SD card and whatnots. And just like the mainstream consumer didn’t give a damn about UMS, the mainstream consumer doesn’t give a damn about SD cards. Stuff like that is just more hardware they’re forced to buy and figure out and use. They only needed them in the past because they had to have them. Apple has removed the reasons why you would want or need an SD card.

So here’s the thing. iPads are the mainstream. This is the future. And we’re living in it.

iOS is great, but it is not something that I could use as my sole computer.

I don’t think that thi s is really the iPad market. I think the iPad basically replaces the second computer (or third, or whatever) for people who already have a primary computer. It is a very good complement to existing computers, but except in a few cases, it’s not a replacement. I think netbooks played the same role.

Yeah, open systems will win out like always -remember when Linux overtook Windows in market share, oh wait…

Otherwise, agree with what you said

A quibble to your otherwise spot-on post. Lenovo’s CEO is NOT out of touch. He knows damn good and well that IBM sold them the laptop business because it was already obviously in decline in 2004. But it’s his business to talk it up so that their customers don’t panic and move any faster to ultrabooks, tablets and smartphones, categories in which they’ve either stumbled or not even known how to get to the starting line.

Because laptops are going away, in the sense that sales of them are flattening and turning down in some cases because budgets are going elsewhere. In the US, "PC" sales (not including iOS stuff) turned down already last year. Worldwide, merely slowing, but you don’t have to look hard to see the same trends globally.

Being valuable has nothing to do with being niche. Microsoft is bigger by a 10 to 1 (don’t quote me on that) ratio compared to Apple but yet Apple’s market value is bigger than Microsoft.

I’m with you on that one. In my experience, despite its huge popularity and success, Apple is one of the most misunderstood companies of all time. I think a lot of people who don’t like Apple, what it does, how or why, have got it all wrong . As far as they are concerned it is all just marketing magic. A simplistic and lazy viewpoint much akin to creationists who ignore the facts of evolution in order to live in cosy little made-up world. Such people can rarely offer any arguments or facts which are based on anything remotely resembling the reality of Apple’s success of the last 15 years and yet they still think they know what they are talking about.

Apple is by no means perfect, but I think it is very had to find another tech company which is quite as pioneering and successful. All eyes are on Apple for a reason.

It is difficult to get a man to understand something when his job depends on not understanding it.

Upton Sinclair
US novelist & socialist politician (1878 – 1968)

The iPad has already made a major dent in the low end laptop market: the once booming netbook market is all but dead, and PCs in general had a negative growth rate the last quarter, quite steep if we exclude all Apple products from the PC market.

He’ll be saying different things when/if Lenovo has a tablet that sells in volume. Until then, deny, deny, deny.

We all know what the acronym PC stands for. By that measure iPads are indeed PCs.

How much of the computing does one need to be able to do on a laptop that you can’t do on a tablet before a distinction is actually relevant? If the majority of the daily tasks (for work and pleasure) that the majority of people do around the world can be achieved on a tablet, I don’t think the argument that “iPads are not PCs” holds water. Certainly not when the tablet experience is superior in many cases.

There is still a place for powerful, larger machines than tablets for people like us to write and compile software or do more specialist work, but when it comes to what most other people use their PCs for most of the time I don’t believe many of them are creating content, writing or designing. We are the ones in a niche and as tablets and other mobile devices become more sophisticated I think creating content on them will be an ever greater feature of them.

Maybe we should define a new term for powerful non-mainstream computing instead?

Just add Siri and your whole theory goes out the window… Keyboards will never be the answer in modern computing…. the next generation iPad 3 will have a quad-core ARM chip that will give all the functionality now missing in iPad 2. Even the next MacBook Air will run on the same ARM quad-core chip in the next iteration…. The age of the PC is rapidly changing…. and both Intel and Microsoft are being left behind as these new innovations in computing and software surge ahead, while the form factors take advantage of new technology.

A computer allows you to create extensive written content, it allows you to make precision graphics, … it allows external components to be added to it to provide additional capability.

You’re either ignorant about the iPad’s talents in creating business graphics, photo edits, even video editing at levels that 99% of people don’t do on a desktop-class PC, or you’re intentionally blowing smoke. Just because software to do MY job at all well does ‘t exist on an iPad doesn’t mean it’s not a PC.

A computer … allows external components to be added to it to provide additional capability.

Don’t forget all the peripherals that either plug into the iProducts or connect over wifi to monitor your health conditions, hook up to your home automation, print, do backups, network, see HD video or big-screen games and so much more, thru wifi. No, nobody is going to use an iPad to control a nuclear power station (Apple ToS actually forbid it), but again, there is plenty of connectivity for all but a tiny handful of uses.

it allows you to write, debug, build, test complex lines of code

I Googled for how many developers there are in the world and saw estimates running from roughly 1 million to 15 million. The latter seems awfully high for the number of commercial and in-house apps that I’d think there are; many of the 15 million must’ve only done a bit as part of a class. Whatever.

That’s what? — somewhere around 0.2% to 5% of the people who use computers? So let’s not worry fabulously about how important coding is to people’s use of computers. But anyway, you’re apparently NOT aware that there ARE some code-writing apps on the iPad now, useful for the same educational and test purposes that are all that many people will write code for. Yes another edge case shown as false.

a computer can do all of the things a tablet (though not all as smoothly

Not even close to true. Exactly NOBODY reads books on a laptop or desktop while hanging onto a subway strap. You DON’T bring your laptop to check up on email, twitter or sports scores during intermission at a concert. Booting up your laptop over a 3G modem to get directions while you’re on your way to a sales call is to invite a fatal crash. And BlackBerry would not have become the biggest smartphone vendor of 2006–2009 if notebooks were a practical alternative for high-powered business and government types who need to be productive 24X7.

You’re welcome to call yourself John Smith, kuruption213 or any other name that you like. But when you’re communicating with anybody outside of a small cabal of WinTel or linux diehards, denying that iOS devices are PCs means that you’re just talking some obsolete language that nobody else understands.

Depends on what you want to ‘create’.

I go to a wealthy university with tons of wealthy students and a tiny fraction of people have iPads or comparable Android tablets.

You are a twelve year old who is really bad at lying. And since I said it, it must be true.

Gosh, you really ought to go buy a copy of The Innovator’s Dilemma and read what was obvious to the Harvard Business School prof about twenty years ago. I’ll wait.

Done? Good. Did you read how EVERY business that was disrupted by newer, small technologies, used the VERY SAME argument you used? "These things are toys; they can’t handle the big jobs we can. Our customers tell us to ignore them and concentrate on our high-quality, high-price, full-capability products."

And so, the US auto industry, the disk drive business, the backhoe business, and dozens of other well-managed businesses passed from high growth then high profitability, and into eventual irrelevance and perhaps bankruptcy. Smart managers, paying attention to their customers, drove their firms into the ground by focusing on the shareholder value of high profits based on their existing products.

Did you like how Christensen saw your arguments coming 20 years ago, and how they have been irrelevant for decades?

Oh, a PS: if your time is too valuable — more valuable than that of big tech firm CEOs’ time, cuz they read & recommended Dilemma — go ahead and spend just 3 minutes on Wikipedia’s Disruptive Technology entry. Same story but without the overwhelming evidence.

Did any of those devices you mention sell 40 million in their first two years? Niche market indeed.

Yes, the numbers are small by comparison now. But if the iPad is a niche market, the figures and growth will need to slow down pretty soon for fear of it turning into a mainstream market. There are no signs of a slowdown and every sign that things are going to get even worse for the traditional PC industry.

Don’t hold your breath waiting for technological progress (portability, simplicity, ever greater sophistication) and new business opportunities to start to slow down.

Despite being a certified Apple fan and employee of an investment firm, I have to take issue with the notion that profits are everything. Yes, Apple is making more profits than all its competitors combined and that shows that they are providing a LOT of value past the cost of the parts they put into their stuff, and that’s a good measure.

But the tech business changes extremely rapidly these days; you could’ve looked at RIM in 2006 and said BlackBerrys were the king of the mountain; they’re not likely to be an independent firm at yearend. A stunning U-turn from a great innovator to a firm that sneered at the iPhone and is paying a huge price for not seeing how customers would flock to it.

I’d say the better test is how well a company is positioned to create new customers by creating new capabilities that people can identify with. And Apple doesn’t look too shabby on that score, either.

The “consuming” vs. “creating” dichotomy is too simplistic. There are a large number of people who need to access or share content that they or someone else has created. The iPad is really good for this…and this is a very common business case.

I “create” certain documents on my desktop at work. But when I go to meetings to discuss the documents and consider possible revisions, I’m going to be talking about the content, but I won’t be creating any new content at the meeting or offsite. So iPads are much better than laptops in this environment.

Again, they are not computer replacements. They are second computer replacements – and for many use cases, they are much better than second computers.

I hope there won’t be convertible devices. They’re trying to bridge a gap that shouldn’t be. That is a niche market. The only way the iPad is niche is because there is only an iPad market, not a tab;let market.

I think the problem is the implication that the iPad is not only a niche market today but that it is forever a niche market and it will stop growing at some point leaving laptops and desktop PCs to stay dominant. Yet there is no evidence that the iPad will stop growing and plenty of evidence that the market can and will be disrupted.

So yes, forget the tech world, most people want computers that they can use with minimal fuss to do quite mundane things. That is what the iPad offers and what companies like Microsoft are finally waking up to with Metro. Getting rid of the legacy crap, the cables, the filesystem, the malware, the things that don’t and shouldn’t matter to most people is why the iPad is succeeding. The price helps too (maybe a $1000 iPad would have helped keep it niche!…).

This niche market explanation isn’t going to cut it in the real world if the growth of the iPad continues. So forget about today’s snapshot of the numbers and do a bit of calculus, look at the growth! And look at the disruption, the untapped market of people who just want to keep in touch, browse or do general computing…. and look at the simple fact that the iPad can’t be half as limited as people who don’t use them regularly seem to think – otherwise how would the iPad sales have reached even these ‘niche’ multi-million figures so quickly? Wouldn’t there be evidence that the iPad’s capabilities are starting to creak to breaking point? Where is the evidence that this is happening? As far as we can tell the iPad has nailed it and there is zero reason to think that it will slow down.

If you don’t think the iPad is going to completely replace your powerhouse PC laptop, you’d be right but people like you and I that need computers to do heavy-lifting are the niche market. I personally would rather have a separate machine for writing code and designing software and a separate machine for the other 2/3rds of the day for reading the web and communicating etc. For some people, yes a yoga-like transformer combination machine is the other option, but that is your niche product right there!

A convertible machine seems to smack of not wanting to let go of the past. It’s a washing-machine and toaster all-in-one. 2 different jobs right?

Correct. According to wikipedia: " defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. […] So to speak, the Niche Market is the highly specialized market that tries to survive among the competition from numerous super companies. […] Nevertheless, the final product quality (low or high) is not dependent on the price elasticity of demand; it is associated more with the specific needs that the product is aimed at satisfy and in some cases with brand recognition with which the vendor wants to be associated (e.g., prestige, practicability, money saving, expensiveness, planet environment conscience, power, &c.)."
You can find better definition I’ m sure in your Kotler’s book but this one contains enough good element to say that the pad is still a niche market. It’s not a necessary product, it just consumes content, and it’s very dependent to the apple culture. The iPad works because it’s a product that unifies all Apple’s content in one product. The Android don’t have the same success because all manufacturers don’t have the same pop culture.
So if I was a Lenovo investor I would think that maybe their strategy is clear. Why get into a market where we don’t have the culture of an Apple brand (which resonates to Western culture), instead, we can spend money in markets where we are strong (PC, smart phone, companies and not individual, emerging markets, etc.), and from then, create new products for new needs and associate this needs with the brand Lenovo?
The pad market is hugely profitable because there’s one big actor and the newcomers have chosen the same price strategy. Once Asus or other will sell their tablet at half the price so half the margin, will it make sense for Lenovo to stay in the pad market? Apple makes money because they have the ecosystem. What’s there to take for Lenovo? Lenovo has the professional market : servers, laptop, pc and all the professional services associated. How to integrate the pad in it? i think he answered a little to this question.