back to article Stumbling Lenovo turns in record loss

Stumbling PC giant Lenovo saw sales and profits fall further than expected in the fourth quarter. The firm, which owns the ThinkPad brand, said sales fell 26 per cent to $2.8bn in the fourth fiscal quarter of 2009. Gross profit was down 49 per cent to $285m. Factoring in restructuring charges and other costs Lenovo made a pre- …

COMMENTS

This topic is closed for new posts.

Sinking brand

isn't this why IBM sold it off in the first place?

0
0

Shame

They make good machines. We're only a small company (~30 people and expanding) and I must have ordered a dozen of their 3000 series machines in the past few months. Simple, solid, reliable machines with a good feature set that I can install XP on. I like 'em.

0
0
Silver badge

ThinkPad

Who cares who owns a name?

If it ain't IBM making the product then it's hard to justify the high price tag of a Lenovo ThinkPad.

The "no one ever got fired for buying IBM" adage is still true, but ThinkPad ain't IBM any more.

0
0
Anonymous Coward

Presumably...

...Greater China refers to mainland China and doesn't include Taiwan?

Or is it maybe the USA that they're not counting? After all, China does seem to own quite a lot of that!

0
0
Thumb Down

@Greg

Similar situation here, we've bought thinkpads for years, and I bought myself a 3000 series N500 in the January sales.

Times are changing though. The last two R400s we bought have had serious issues with them, and my own N500 has been with them for 6 weeks now, due to random power failures whether it's on battery or not, and even when it's plugged in with no battery attached. I've just been told that it's going to be shipped to another country for further testing.

Compared to the Sony Vaio SR series we've been getting in, they have become extremely unreliable. I might have to find a new favourite brand.

Simon

0
0
Thumb Down

Nasty

As someone who has owned an IBM Thinkpad, and now a Lenovo Thinkpad, I think its easy to see why they are doing badly. The difference in build quality is just evident everywhere. The Lenovo's feel cheap, they feel flimsy, and the components are cheap. The only reason that they haven't done worse is the value of the Thinkpad brand, and that can't last forever.

0
0
Unhappy

Knew it was coming...

I was disappointed the day IBM decided to sell the Thinkpad line to Lenovo. I have been with the Thinkpad product line through 5 generations (600x, T2x, T3x, T4x, and finally T6x). The T6x laptops are literally falling apart - cracked cases and such. No, they are not in a severe environment, just normal everyday usage.

The old 600's, T20's & T30's were used in the exact same way. They never fell apart. It is very clear to us the Thinkpad product quality has fallen significantly. They are now just another brand and no longer the premium they once were.

We did an evaluation of competing products. Our next laptop purchase will be from a different brand.

0
0
Unhappy

My anecdote!

Lenovo reneged on my Windows Vista refund, and my T60 already has two screen defects.

Their Indian-rific technical support got a bit uppity after they dropped Ubuntu from their product lineup. This probably coincided with a restructuring.

Oh well, Lenovo is just another wintel vendor that will go bust.

0
0
Stop

Death spiral in USA ?

When Lenovo were getting IBM-related business, they were doing just fine, courtesy of the "never got fired for buing IBM" rule of thumb.

Over the last 18 months, since the IBM sales team were removed from compensation for bringing forward client deals, Lenovo has failed to step uyp and stand on its own.

Conclusions:

1. IBM made the right move to get out of a non-profitable business and focus on services and proprietary hardware, software where the margins are greater.

2. Lenovo does not have the higher margin lines (printers, servers, storage) like HP and Dell to support the high volume, low margin client business in the USA.

3. Lenovo's in a death spiral for their USA business. I wouldn't be surprised to see them exit the US market to focus just on Europe/Asia.

0
0
Unhappy

So, what should I get now?

My T61 is due for an upgrade, had a T20, T23, T30, T40 before and yes, the T61 sucks next to all of them. Almost sure I won't go with a T400, so, can you guys suggest what brand / line to switch to? I know I'm asking for a lot, but a workable trackpoint is a must.

0
0

@ FaberfoX

Dell's Latitude line has trackpoints. I can't say as I like the trackpoint in my Latitude D610 as much as I liked the trackpoint in my IBM Thinkpad from the golden era of the IBM Thinkpad (circa 2000), but it's better than no trackpoint.

0
0
Alert

Companies are dropping ThinkPads

Lenovo has clearly failed to keep up what was keeping the ThinkPad brand alive in a world of cut throat pricing and low margins. If the ThinkPads were being sold before Lenovo acquired the brand was because of their robustness. When Lenovo started to "optimize" the design to extract higher margins and reduce the price of each unit sold, they started to lose customers.

Lesson for the marketing executives: while the brand by itself does have the power to invoke some feelings on the customer, you cannot keep it alive without a product baking those feelings behind. So instead of focusing on concepts and abstract meanings, marketing is about creating the product that satisfies the user needs.

Lesson for financial drones: just making an spreadsheet that shows that you can make the brand profitable does not mean anything if you're getting the profit by dropping some of the attributes that make it sold in the first place (i.e, quality)

Lenovo cannot pretend to sell ThinkPads without them having the properties that people associate with ThinkPads. Better drop the brand altogether, which of course would be an stupid decision giving the loads of money they paid for it.

Lesson for the rest of the world: when IBM sells something it's because they know they cannot make a decent profit of it any longer. If you think that you can do better than IBM financial guys and IBM lawyers, think twice.

IBM has lately became a formidable legal and financial machine. You simply cannot be beat them at that. The only way of beating IBM is with better technology or services. My view is that in the long term the financial and legal powers at IBM will destroy the company, for the same reasons that Lenovo is destroying the ThinkPad brand. In each sucessive round of "optimization" they are eroding the very fundamental attributes of the IBM brand that made them successful in the first place.

0
0
Gold badge

3 reasons for me

First off, I should say I haven't bought a Thinkpad, so.... but anyway here's the reasons I think people aren't buying.

1) Brand recognition. Some probably quit buying just because "they aren't IBMs any more". I wouldn't, so long as there weren't other changes. But...

2) Quality. I've seen lots of IBM Thinkpads and some Lenovo Thinkpads. The early Lenovos were just IBMs with a Lenovo badge, they were exactly the same. The later ones, as the AC says a few posts above, are not the same. I don't OWN one so I can't say they're bad, but they are not quite as solid.

3) Price. Despite #2 --^, they're charging "old" Thinkpad prices. The economy's down, people don't want to pay that much even if the machine is fantastic.

4) Linux. For me this will knock Lenovo out of the running.... I will not pay the Windows tax.. partially because I don't want to send them money, and even more so because I don't want to be counted as a Windows user when Microsoft etc. claim some huge % of people use Windows.

0
0
This topic is closed for new posts.

Forums