Feeds

Lenovo ups in-house notebook production

It's all about control...

Build a business case: developing custom apps

It could be sweaty palm time for Taiwan’s ODMs after reports emerged that Lenovo is set to step up in-house production of its notebooks and PCs.

The Chinese hardware giant is planning new production lines in Japan and Brazil as well as at its LCFC joint venture with Compal Electronics in northern China, Digitimes reported.

Industry sources told the Taiwan-based IT paper that LCFC would begin production of 300,000 PCs per month by the end of the year, building to an annual target of 10 million.

The move is apparently drive by a desire to control component supplies in a more flexible manner, keep production costs down and tighten control over shipment schedules. At the moment, around 85 per cent of its notebooks are outsourced, mainly to Compal and Wistron.

Having greater control over the production of its kit would appear to make sense for Lenovo, especially given the caution in the global PC market at the moment.

Gartner’s latest sales stats for Q2 showed a year-on-year decline in the US of 5.7 per cent, while EMEA sales grew 1.9 per cent and Asia Pacific climbed 2 per cent.

Despite closing in on HP’s position as global number one, Lenovo has to beware of producing more inventory than the market is demanding, a trap that Acer fell into last year to its cost, according to Gartner.

It remains to be seen whether Lenovo’s decision will hugely impact the health of Taiwan’s ODM industry, which accounts for around 90 per cent of the world's notebooks.

Although the firm shifted 12.8m units in Q2, increasing its market share to 14.7 per cent, there are obviously plenty more fish in the sea.

In fact, if Lenovo is to bring more of its production in-house, it would be travelling in the opposite strategic direction to Samsung, which has begun outsourcing notebook production for the first time – Compal again the lucky ODM.

Lenovo could not immediately be reached for comment. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
You didn't get the MeMO? Asus Pad 7 Android tab is ... not bad
Really, er, stands out among cheapie 7-inchers
Apple winks at parents: C'mon, get your kid a tweaked Macbook Pro
Cheapest models given new processors, more RAM
4K video on terrestrial TV? Not if the WRC shares frequencies to mobiles
Have your say with Ofcom now, before Freeview becomes Feeview
Leaked Windows Phone 8.1 Update specs tease details of Nokia's next mobes
New screen sizes, dual SIMs, voice over LTE, and more
Microsoft stands on shore as tablet-laden boat sails away
Brit buyers still not falling for Windows' charms
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.