Lenovo Tempers Tablet Ferver, Says PCs Will Remain Strong

LAS VEGAS, Jan 7 (Reuters) – Lenovo Group Ltd (HK:0992),
which is making a concerted push into tablets, said it expects
the devices to see good growth but still eventually only make
up a fraction of the broader personal computer market.

Rory Read, chief operating officer for Lenovo, predicted
that tablets will settle in at 10 percent to 15 percent of the
overall PC market.

"I think it will fill in exactly where netbook was. Netbook
I think has faded, it doesn’t have that energy," he said in an
interview on Friday at the Consumer Electronics Show.

Read said he does not expect Lenovo’s tablets to
cannibalize its PC sales: "We see it more as a third or fourth
screen; additive, like a smartphone."

The overall PC market is expected to top 400 million units
this year.

China-based Lenovo, the world’s No. 4 PC maker, has been
increasing sales at a torrid pace. Third-quarter PC shipments
surged 33 percent in the third quarter, according to IDC.

The company showed off one of the more unique tablets at
CES this year. The Lenovo U1 hybrid is a laptop running
Microsoft’s (NASDAQ:MSFT) Windows, with a 10-inch touchscreen tablet
— which runs Google’s (NASDAQ:GOOG) mobile Android platform — that
pops out of the frame.

The device will be available in China in the first quarter
for roughly $1,300. The company’s LePad tablet is also sold
separately for roughly $500.

Read said the U1 is an example of the sort of
differentiated "converged" device that Lenovo is banking on to
drive growth.

He said the company is focused on its hardware business,
and has no interest in moving into areas such as IT services,
where rivals like Hewlett-Packard (NYSE:HPQ) and Dell (NASDAQ:DELL) are
putting considerable energy.

Lenovo moved in 2009 to reacquire the cellphone business it
had previously sold off, and it launched the LePhone smartphone
a year ago at CES.

The device is still only available in China, where Read
said it ranks as the No. 3 premium-priced smartphone.

When asked when Lenovo would launch a smartphone outside
China, Read declined to provide a time frame.

"The idea is to get the scale first. We think you only get
one time to make that best first impression. Other players are
rushing to bring I think premature technology to market."

(Reporting by Gabriel Madway, editing by Dave Zimmerman)