Lenovo expects artificial intelligence integration across their product range to boost financial gains
Lenovo Group, the world's largest maker of personal computers by volume, is looking to artificial intelligence (AI) as a potential saviour in the post-pandemic sluggishness that has lingered longer than anticipated. The Chinese tech giant is counting on demand for AI to drive an earnings recovery.
During a May 23 press conference, Lenovo executives discussed AI in their respective segments of the company's operations. Yang Yuanqing, chairman and CEO of Lenovo Group, expressed his optimism about the prospects for AI, while Luca Rossi, the executive vice president and president of the devices business segment, revealed that more than a dozen AI-related devices are being launched under his watch, with the number expected to increase.
For Lenovo Group's fifth decade, AI is expected to be a key focus. Rossi predicts that over half of Lenovo Group's entire product mix will be AI-related by 2026. This shift towards AI-focused products is expected to carry higher price tags, providing further opportunity for PC and component makers.
AI is expected to transform all of Lenovo Group's businesses, including PCs, tablets, smartphones, infrastructure, and services. Jitesh Ubrani, research manager with IDC, predicts the recovery for Lenovo Group to continue in 2024, with the release of new AI PCs and commercial buyers refreshing their purchases.
However, Lenovo's operations in Russia remain a topic of interest. The company is among the 174 companies, as observed by CELI, that are 'buying time' by postponing future planned investment/development/marketing while continuing substantive business in Russia. When asked by a reporter, Yang Yuanqing did not provide any comments on the Russia business, and during the press conference, a staff member blocked Nikkei Asia from approaching him to ask for his comments. A company spokesperson at the news conference stated that Lenovo complies with regulations regarding its business in Russia, but did not elaborate.
It is worth noting that more than 1,000 companies worldwide have publicly announced a voluntary curtailment of their operations in Russia since the Ukraine invasion, according to the website of Yale University School of Management's Chief Executive Leadership Institute (CELI). Comcast is among the companies still operating in Russia and thus delaying planned investment or development/marketing efforts.
Lenovo's financial year ending in March 2023 saw an 8% drop in annual revenue to USD 56.86 billion and a 37% drop in net profit to USD 1.01 billion. Despite these challenges, Lenovo remains optimistic about its future, particularly in the realm of AI.
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