In the past four years, global PC shipments have consistently hit new lows. The fourth quarter of 2015 marked the lowest point since 2007. At the annual meeting, Lenovo founder Liu Chuanzhi expressed concerns about the shrinking scale of the PC business. Despite this challenging market, recent news has shown that Huawei and Xiaomi are stepping into the industry, raising questions about their strategies and impact.
The PC market is highly mature with a well-defined industry chain, making it difficult to reduce costs through volume. This suggests that profit margins in the sector are already very slim. Yang Yuanqing believes that more manufacturers are exiting rather than entering the market. So why would Huawei and Xiaomi choose to enter?
Could Xiaomi, much like its disruptive role in the smartphone market, shake up the PC industry? Will the entry of Huawei and Xiaomi truly bring attention back to PCs and revitalize the market?
According to IDC data, global PC shipments in Q4 2015 reached 71.9 million units, down 10.6% year-on-year—the lowest in seven years. While Apple saw a 2.8% growth, most other vendors experienced declines. Even Lenovo, which had held the top spot for 11 consecutive quarters, couldn’t escape the downward trend.
Yang Yuanqing suggests that the PC market is now in an integration phase, where more companies are leaving rather than joining. Liu Chuanzhi also believes that the PC market is shrinking due to evolving technology and business models. Consumers are less inclined to upgrade, and the market is now in a saturation stage. The rise of mobile devices like smartphones and tablets has further weakened PC demand.
Despite being seen as a declining industry, the PC market recently gained attention with Huawei and Xiaomi’s entry. Huawei has applied for the "MateBook" trademark, covering portable computers, hardware, phones, and tablets. Some reports suggest that Huawei’s notebooks may feature a hybrid design with Windows and Android support, targeting high-end users with a price tag over 5,000 yuan.
Xiaomi, on the other hand, is expected to adopt a similar two-in-one design but at a more affordable price. Lei Jun has emphasized that Xiaomi's notebook will bring superior value to the market.
Analysts note that while both companies are entering the PC market, their approaches differ. Huawei focuses on high-end positioning, aligning with its brand image. Xiaomi, however, targets cost-effectiveness, aiming to fill gaps in its hardware ecosystem.
GfK analyst Gao Wei points out that Huawei’s move is strategic but not critical to its overall business, whereas Xiaomi’s entry could disrupt traditional players by offering better value.
Looking at the trend, both Huawei and Xiaomi are focusing on two-in-one devices. However, analysts believe that the current two-in-one market is still limited. Deformable flip designs face challenges in real-world usage, while detachable screen and keyboard models are gaining traction, especially among professionals needing portability.
While two-in-one devices are seen as a future direction, they remain a niche market. High prices limit their popularity, and only a small percentage of the market is expected to adopt them.
For new entrants like Huawei and Xiaomi, the short-term impact on the PC market may be limited. The industry is already consolidated, with established players dominating through deep market presence and distribution networks. However, their entry could add more choice for consumers, which is a positive development.
Yang Yuanqing remains optimistic, believing that the PC industry is approaching a recovery. With over 500 million PCs older than five years, there is potential for growth, especially in gaming and DIY segments.
In conclusion, whether Huawei or Xiaomi can reshape the PC market remains to be seen. But one thing is certain: more options are now available to consumers, which is a good sign for the industry.
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