Seeking Alpha
 

Lenovo Group Ltd. ADR (LNVGY)

- OTCPK - Current
  • Wed, Apr. 29, 6:21 PM
    • The WSJ reports AAC Technologies, one of the two suppliers of the Apple Watch's (NASDAQ:AAPL) taptic engine (enables its haptic feedback features) was making defective components, and thus slowed down the ramping of Watch production. No recall is planned, since Apple doesn't believe Watches with the defective part shipped to consumers.
    • Apple has reportedly responded by moving nearly all of its taptic engine production to Japan's Nidec, which didn't encounter the same issue. However, the WSJ states "it may take time" for Nidec to up production, and that Apple told some Watch suppliers last week to "slow production until June."
    • The report comes as shipping times for many Watch models remain lengthy; a survey from research firm Slice indicated only 22% of U.S. Watch orders were delivered during the first weekend (376K out of 1.7M).
    • In its FQ2 10-Q, Apple discloses the European Commission "could require Ireland to recover from the Company past taxes covering a period of up to 10 years," and that such tax payments could be "material." The EC has long been probing the use of Irish legal structures by Apple and other U.S. multinationals to lower their local tax bills; the FT reported last year Apple could receive a fine of up to several billions of euros.
    • IDC estimates Apple's 61.2M calendar Q1 iPhone sales were good for an 18.2% global smartphone unit share, up from 15.2% a year ago; revenue share is likely above 40%. Samsung (OTC:SSNLF) had an estimated 24.5% unit share (82.4M shipments), down from 30.7% a year ago. #3 Lenovo (OTCPK:LNVGY) fell to 5.6% from 6.6% after factoring the Motorola Mobility deal.
    • Overall, IDC thinks smartphone shipments rose 16.7% Y/Y to 336.5M. The total mobile phone market was roughly flat at 458.9M units.
    | 87 Comments
  • Thu, Apr. 9, 6:03 PM
    • As Intel's (NASDAQ:INTC) March 12 warning led many to expect, PC sales were weak in Q1: IDC estimates shipments fell 6.7% Y/Y to 68.5M, a much sharper drop than Q4's 2.4% and Q3/Q2's 1.7%. Gartner estimates shipments fell 5.2% to 71.7M. With IDC also reporting of price pressure, revenue declines might be larger.
    • IDC: [T]he Q1 market faced multiple headwinds – including inventory build-up of Windows Bing based notebooks, commercial slow down following the [Windows] XP refresh and constrained demand in many regions due to currency fluctuations and unfavorable economic indicators."  Gartner thinks sales of  "mobile PCs" (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply. "PC replacements will be driven by thin and light notebooks with tablet functionality."
    • Both Gartner and IDC report U.S. PC shipments fell only ~1% Y/Y. On the other hand, IDC thinks Japan (another high-ASP market) saw shipments fall 44%; strong Q1 2014 spending prior to a tax hike made for tough comps.
    • Market leaders Lenovo (OTCPK:LNVGY) and HP (NYSE:HPQ) continued taking share from firms with less scale: IDC estimates Lenovo's share rose to 19.6% from 17.6% a year ago (3.4% unit growth), and HP's to 19% from 17.1% (3.3% unit growth).
    • #3 Dell's share rose to 13.5% from 13.4%; #4 Asus (OTC:ASUUY) was flat at 7.1%, and #5 Acer (OTC:ASIYF) rose to 7% from 6.3%. Everyone else collectively fell to 33.9% from 38.4%.
    • Unlike in Q4 and Q3 (seasonally stronger quarters for the company), Apple (NASDAQ:AAPL) wasn't in the global top-5. IDC estimates the company's US. unit share rose to 10.9% from 10.6%, good for fourth place (revenue share is higher).
    • Other PC industry names: MSFT, AMD, NVDA, MU, STX, WDC, HTCH
    | 110 Comments
  • Mon, Mar. 30, 6:28 PM
    • Thanks in large part to the low-cost Moto G (now Brazil's top-selling smartphone), Lenovo's (OTCPK:LNVGY) Motorola Mobility unit has doubled its Brazilian smartphone share to 18% (per IDC), a figure that trails only Samsung's 43%.
    • Google originally launched the Moto G with a 4.5" display and a $179 unsubsidized price in 2013. A second-gen model contains a 5" display and a similar price, though it goes for $260 in Brazil due to taxes/tariffs. A second-gen version of the cheaper Moto E (4.5" display) will sell for $120 in the U.S., and $200 in Brazil.
    • Motorola's Brazilian success highlights the one-time mobile giant's success at improving its fortunes by focusing on cheap Android phones that are a cut above many comparably-priced products in terms of design/build quality. IDC estimates Lenovo (aided by Motorola) had a 6.6% global Q4 smartphone unit share on the back of 24.7M shipments. Motorola's shipments rose 118% over the whole of 2014.
    | 1 Comment
  • Fri, Mar. 13, 3:21 AM
    | 27 Comments
  • Sat, Mar. 7, 3:26 PM
    • With Intel's (NASDAQ:INTC) Grantley Xeon CPU launch and Web data center investments offsetting weak high-end server demand, IDC estimates global server revenue rose 1.9% Y/Y in Q4 to $14.5B, and Gartner estimates it rose 2.2% to $14B; those figures compares with Q3 growth estimates of 4.8% and 1.7%, respectively.
    • Likewise, IDC estimates global enterprise storage revenue rose 7.2% Y/Y in Q4, aided by Web investments and healthy demand for mid-range systems featuring integrated flash. Q3 growth was pegged at 5.1%.
    • IBM had a rough time its both the server and storage markets: IDC believes its storage share fell to 9% (tied for #3) from 12.7% a year earlier, and Gartner estimates its server revenue fell 14% if one excludes Big Blue's x86 server unit, which was just sold to Lenovo. After accounting for the x86 sale, IDC estimates IBM's server share was at 13.7% (#3) vs. 26.8% a year ago.
    • HP (NYSE:HPQ) fared a little better: IDC has its server share falling fractionally to 26.8% (still #1 overall), and its storage share falling to 13.8% (#2) from 14.1%. The company's x86 server unit has been gaining ground against IBM's former business, but its high-end server sales remain weak.
    • Cisco's (NASDAQ:CSCO) UCS server line (recently refreshed) continues to gain ground: Its share rose to 5.3% (#5) from 4.5%, with full-year revenue pegged at $2.9B. With the help of aggressive pricing and x86 growth, Dell's server share rose to 16.7% (#2) from 15.2%, while its storage share slipped to 9% (tied for #3) from 9.2%. Lenovo (OTCPK:LNVGY) claimed a 7.6% server share (#4) thanks to the IBM deal, kicking Oracle (NYSE:ORCL) out of the top-5 along the way.
    • EMC, whose high-end storage sales have been pressured (mid-range/flash demand has been better), saw its storage share drop to 22.2% (still #1) from 23.1%. NetApp (NASDAQ:NTAP), which posted an FQ3 miss and light guidance last month amid tough mid-range competition from EMC and others, saw its share drop to 7.2% (#5) from 8%.
    • Not surprisingly, the white-label hardware beloved by Google, Facebook, Amazon, etc. continued to take share. IDC estimates such hardware, referred to as ODM Direct, claimed server and storage shares of 8.2% and 12.8% vs. 6.4% and 9.9% a year ago.
    • Sales of x86 servers, the lion's share of which run on Intel CPUs, rose 7.1% to $11.5B. Sales of non-x86 servers fell 14% to $3B, thanks to declining demand for both mainframes and UNIX servers running proprietary RISC CPUs. "Early-stage revenue" was seen for ARM (NASDAQ:ARMH) servers, largely via HP's Moonshot line.
    • Other companies with strong server and/or storage exposure: STX, WDC, SMCI, MLNX, AVGO, QLGC, RHT
    | 8 Comments
  • Thu, Mar. 5, 7:49 PM
    • The WSJ reports Google's (NASDAQ:GOOG) U.S. mobile phone service will initially feature just one phone - the mammoth Nexus 6 phablet, originally designed by Google and made by Lenovo's (OTCPK:LNVGY) Motorola Mobility unit. iPhone fans are out of luck, as are those who prefer more modestly-sized Android hardware.
    • The paper adds the service might launch by month's end. As previously rumored, it will rely on Sprint (NYSE:S) and T-Mobile's (NYSE:TMUS) networks, along with Wi-Fi hotspots.
    • For those curious, the Nexus 6 has a 6" quad-HD (2560x1440) OLED display, a 13MP rear camera with optical image stabilization, 4K video recording support, and a large f/2.0 aperture, and Qualcomm's (NASDAQ:QCOM) high-end Snapdragon 805 processor (quad-core, 2.7GHz.). Naturally, it runs on an unmodified version of Android 5.0 (Lollipop).
    • The report suggests Google will try to avoid ruffling the feathers of its U.S. carrier partners by limiting the amount of hardware supported by its phone service ... and that it will have it act as a showcase for what it thinks mobile services should be like (as suggested by Sundar Pichai) by offering the services through its favorite devices.
    • Separately, Google has launched its long-rumored U.S. car insurance shopping site in California (more states will come later). Google asserts the site, known as Google Compare, can provide price quotes for various providers in "as little as 5 minutes."
    • A U.K. version of Google Compare has been running for two years. Like rival car insurance shopping sites, Google will get a referral fee on sales; major insurers such as MetLife and Mercury Insurance are on board.
    | 28 Comments
  • Tue, Mar. 3, 7:05 AM
    • Connecticut AG George Jepsen's office said it launched a probe into Lenovo's (OTCPK:LNVGY) sales of laptops preloaded with an encryption-breaking adware program known as Superfish.
    • Reports that the preloaded software tracks users' web searching and browsing for advertising purposes are "alarming revelations" that suggest Lenovo may have "seriously undermined computer users' online security and privacy," Jepsen said in his Feb. 27 letter to Lenovo.
    • Other state attorneys general may also begin looking into the situation.
    • Previously: Lenovo tech woes continue (Feb. 26 2015)
    | 1 Comment
  • Thu, Feb. 26, 4:05 AM
    • Just a week after apologizing for bundling computers with an encryption-breaking adware program known as Superfish, Lenovo (OTCPK:LNVGY) said a cyberattack had taken down its website on Thursday, although it was not clear who was behind the breach.
    • Hacker group Lizard Squad, which has taken credit for several recent high-profile outages, including Sony's PlayStation Network and Microsoft's Xbox Live, has claimed responsibility for the attack.
    | 2 Comments
  • Wed, Feb. 25, 12:43 PM
    • As of 2012, Cisco (CSCO -0.9%) had 60 products on a Chinese government list of products approved for purchase by state entities. As of late 2014, it had none, according to Reuters' analysis of government data.
    • PC/server virtualization software vendor Citrix (CTXS +0.5%) has also seen its products disappear from the list, as have Apple (NASDAQ:AAPL) and Intel's (NASDAQ:INTC) McAfee security software unit. While the total number of products on the list has risen by over 2K since 2012 (to nearly 5K), the number of approved foreign tech brands has fallen by a third.
    • The data highlights the ripple effects of the 2013 NSA spying uproar, as well as China's broader interest in promoting local tech firms relative to foreign suppliers. Bloomberg reported in December the Chinese government is "aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020."
    • Cisco's Chinese sales have already been under heavy pressure for several quarters. Thanks in part to the government's efforts, the networking giant's Chinese orders fell 19% Y/Y in the January quarter, compared with just a 1% drop for other Asia-Pac markets.
    • Lenovo (OTCPK:LNVGY), ZTE (OTCPK:ZTCOY), and Huawei are among the local firms likely to benefit from the government's attempts to buy local.
    | 25 Comments
  • Wed, Feb. 18, 1:35 PM
    • Fresh off acquiring IBM's x86 server unit, Lenovo (OTCPK:LNVGY) plans to create an ARM (NASDAQ:ARMH) server prototype for its IBM-developed NeXtScale high-density server line (used in scale-out data centers running Web/cloud, HPC, and analytics workloads). The effort is part of a collaboration with a U.K. HPC R&D lab.
    • Lenovo's server will run on Cavium's (NASDAQ:CAVM) ThunderX ARM server CPU line, which supports up to 48 cores per chip and clock speeds of up to 2.5GHz. Lenovo asserts 12 of its ARM servers will support up to 1,152 CPU cores and occupy a modest 6U of rack space.
    • The deal gives Cavium a high-profile client as it battles against AppliedMicro, AMD, Qualcomm, and others in the budding ARM server CPU market. Cavium has tried to differentiate itself from rivals in part by creating ThunderX CPUs optimized for storage, networking, and security appliances, as well as by providing high levels of I/O bandwidth. Shares have made new highs.
    | Comment!
  • Wed, Feb. 4, 1:22 PM
    • China's Leiphone reports Baidu (BIDU +0.3%) is investing over $100M in Fancy Maker, a new Lenovo (OTCPK:LNVGY) brand (first announced in October) created to take on Xiaomi and Apple in the Chinese smartphone market.
    • Like Xiaomi, Fancy Maker (begins operations in April) will rely on online sales and viral marketing. As Marbridge Consulting observes, Fancy Maker will likely agree to pre-install Baidu's mobile apps/services as part of a deal; Qihoo's recent $409M investment in a JV with Chinese Android OEM Coolpad features such terms.
    • IDC estimates Xiaomi had a 5.3% Q3 global smartphone unit share (211% Y/Y unit growth), and Lenovo a 5.2% share (38% unit growth). With Motorola Mobility on the books, Lenovo estimates it had a 6.6% share in calendar Q4, with ~60% of its phone sales coming outside of China.
    • Baidu's Q4 report arrives on Feb. 11.
    | 1 Comment
  • Mon, Jan. 12, 5:58 PM
    • IDC estimates global PC shipments fell 2.4% Y/Y in Q4 to 80.8M - a bigger decline than Q3 and Q2's 1.7%, but better than expectations for a 4.8% drop. Gartner is more positive, estimating shipments rose 1% to 83.7M.
    • Both firms observe emerging markets, where tablet cannibalization remains a major issue, remain in worse shape than developed markets. IDC also states commercial PC demand (boosted earlier this year by MSFT's ending of Win. XP support) has slowed, and that "market progress has been fueled by low-priced systems, including growth of Chromebooks and [Microsoft's] promotion of Windows 8 + Bing."
    • On the bright side, both IDC and Gartner report Asia-Pac returned to positive growth, and that broader consumer demand is gradually improving. The U.S. consumer market is expected to return to positive growth in 2015, aided by slowing tablet demand and the Windows 10 launch.
    • IDC believes all top-5 vendors gained share from rivals with less scale. A quarter after cracking the top-5 for the first time with a 6.3% share, Apple's (NASDAQ:AAPL) unit share is believed to have risen to 7.1% (+130 bps Y/Y) on the back of 4.9M shipments (+18.9%). Given higher ASPs, revenue share might be around 15%.
    • Market leader Lenovo's (OTCPK:LNVGY) share rose 140 bps to 19.9%; #2 HP's (NYSE:HPQ) rose 300 bps to 19.7%; #3 Dell's rose 140 bps to 13.5%; #4 Acer's (OTC:ASIYF) rose 40 bps to 7.7%. Non-top 5 firms saw their share drop 740 bps to 32.2%, with their shipments declining 20.7%.
    • Intel (NASDAQ:INTC), which tends to have good visibility into industry demand, reports on Thursday.
    • Related tickers: AMD, NVDA, STX, WDC, HTCH
    | 43 Comments
  • Wed, Jan. 7, 5:05 AM
    • After spending about $5B last year to buy the Motorola smartphone business and IBM's low-end server unit, Lenovo (OTCPK:LNVGY) Chief Executive Yang Yuanqing says that the company's focus for 2015 will be on integration, not more acquisitions.
    • Yang doesn't expect Motorola to be profitable for four to six quarters, but he reaffirmed that the new server unit from IBM should turn a profit within the first year.
    • Lenovo will also bring Motorola phones back to China this quarter, reintroducing the brand to the world’s largest market after an absence of more than two years.
    | 1 Comment
  • Mon, Jan. 5, 5:33 PM
    • HP (NYSE:HPQ) has launched the Stream Mini and Pavilion Mini, tiny Windows desktops that respectively sell for just $180 and $320, and take aim at desktops running Google's Chrome OS (i.e. Chromeboxes). The Stream Mini has only an Intel Celeron, CPU 2GB of RAM, and a 32GB SSD. The Pavilion Mini has a Pentium CPU, 4GB of RAM, and a 500GB hard drive.
    • The tech giant has also launched a slew of high-end displays: The 23.6" Zr virtual reality display, which lets users view 3D images (comes ahead of HP's 3D printer launch); new 27" 4K and 5K-resolution displays; and several displays with curved panels.
    • Seagate (NASDAQ:STX) has launched the Seven, a 500GB portable hard drive that's just 7mm thick, as well as a 500GB Wi-Fi-capable hard drive (the Wireless) that lets users offload content from mobile devices to PCs. Also unveiled: The Personal Cloud and Personal Cloud 2-Bay, home media servers that respectively feature 3TB-5TB and 4TB-8TB of capacity. The 2-Bay backs up files to a second drive.
    • SanDisk (NASDAQ:SNDK) has launched: 1) The Ultra Dual, a line of of flash drives that connect PCs with Android phones by featuring standard USB connectors on one end, and micro USB connectors on the other. Prices range from $23-$64. 2) The SSD Plus, an entry-level SSD line using 19nm NAND flash, and priced at just $70-$110 (120GB-240GB capacities).
    • Ahead of the Apple Watch launch, Garmin (NASDAQ:GRMN) has rolled out three smartwatches. The Vivoactive starts at $250, and pairs a GPS radio with support for mobile notifications. The Fenix 3 starts at $500, and features a number of advanced sports/fitness tracking features. The Epix starts at $550, and combines many of the Fenix 3's features with a moving map.
    • Lenovo (OTCPK:LNVGY) has launched: 1) The Vibe Band V10, an $89 fitness tracker with a 1.4" e-ink display. 2) The P90, a 5.5" smartphone with a quad-core Intel Atom CPU and optical image stabilization. 3) The Vibe X2 Pro, a phone that sports an 8-core Qualcomm Snapdragon CPU and (notably) 13MP cameras on both the front and rear.
    • Prior CES coverage
    | 1 Comment
  • Dec. 21, 2014, 1:42 PM
    • Xiaomi, whose breakneck growth has led it to quickly emerge as a top-5 smartphone OEM (per Gartner and IDC), is raising over $1B at a $45B+ valuation, the WSJ reports.
    • The round is said to be led by a tech investment fund run by ex-Morgan Stanley analyst Richard Ji. A P-E firm affiliated with Alibaba founder Jack Ma is also reportedly participating.
    • Gartner and IDC respectively peg Xiaomi's Q3 smartphone share at 5.2% and 5.3% (#4 and #3 globally). The company, known for liberally borrowing ideas from Apple and keeping costs low by heavily relying on online/viral marketing, has said it's aiming to sell 60M phones this year and 100M next year, in part by aggressively expanding in other emerging markets.
    • Rivals Lenovo (OTCPK:LNVGY) and Coolpad are both trying to take a page from Xiaomi's playbook. Gartner and IDC respectively have Lenovo's Q3 smartphone share at 5% and 5.2% (#5 and #4). Lenovo, also the world's biggest PC OEM, has a mere $14.6B market cap on the Hong Kong exchange.
    • Meanwhile, Indian e-commerce leader Flipkart has raised $700M in a funding round reportedly featuring a $10B+ valuation, just five months after raising $1B at a ~$7B valuation. Investors include Yuri Milner's DST Global (of Facebook/Twitter fame), Tiger Global Management, and Singapore sovereign wealth fund GIC.
    • Flipkart's annual GMV run rate topped $1B earlier this year. Competition is provided by Indian e-commerce marketplace Snapdeal (backed by eBay and SoftBank), and also by Amazon, which in July committed to investing $2B in India as it tries to take advantage of liberalizing rules for foreign e-commerce investment.
    • Previous: Uber raises $1.2B at $41B+ post-money valuation
    • Previous: Barron's argues today's tech bubble is in private markets
    | Comment!
  • Nov. 28, 2014, 8:59 AM
    • China's Fenda Technology has announced that it has been selected by Lenovo (OTCPK:LNVGY) as a qualified supplier for the vendor's wearable devices, says DigiTimes according to a Chinese-language Sina.com report.
    • The report said that the wearable is possibly a smart wristband and will have a good chance of being showcased Jan. 6-9 at CES 2015 in Las Vegas.
    | Comment!
Visit Seeking Alpha's
LNVGY vs. ETF Alternatives
Company Description
Lenovo (HKSE: 992) (ADR: LNVGY) is dedicated to building exceptionally engineered personal computers. Lenovo's business model is built on innovation, operational efficiency and customer satisfaction as well as a focus on investment in emerging markets. Formed by Lenovo Group's acquisition of the... More