1. Journalists love to headline percentage profit declines, because it's a bigger number, but large companies often have big swings in profitability. Revenue changes are much more important, and the article states the revenue was down 24%.
2. I'm still baffled that this can be remotely surprising to anyone. All these "pandemic surge" companies (think Home Depot, Lowes, Peleton, and here Lenovo with laptops) had to have known this was just temporary. I mean, they sell durable goods, and obviously the pandemic pulled a ton of demand forward (as well as added demand). Nearly every kid in the country needed a laptop for remote school during the pandemic. How on earth did anyone think that demand could continue?
Re: 2, it's just that nobody involved has any incentive to act like good times won't continue indefinitely. That's the natural consequence of pricing companies as the present value of their future earnings.
Executives don't care. Of course they knew. They'll do anything for money even if it means destroying lives. They need that bonus and they need it now.
I don't see anywhere in that fine article that stated that Lenovo implied that sales were going to continue to go up, or that their actions were going to "destroy lives".
Steelman: the irresponsible hiring sprees that many companies went on could be considered rather unethical considering all of them have the foreknowledge that the corona-era growth was temporary.
Steelman of the other side: Not producing the laptops that children needed to school from home during Covid would have been damaging, too. Not producing exercise equipment for people stuck at home would have been damaging, too. And so on.
Absolutely nothing stopped them from advertising those positions as temporary. I would be willing to bet most job offers seen by normal people said nothing about urgency, they were likely sold as permanent positions.
And no, I do not think it should be up to the job seeker to understand larger industry trends before signing on.
Nobody said anything about jobs for life. When you are in a position where you know that certain events are pulling unprecedented demand forward, you know those certain events have an expiration date.
I don't think honesty in job listings is beyond the pale to ask of huge corporations. If you need temps due to sudden demand, hire temps.
Layoffs do cause damage to people's lives, but so does not having a job in the first place. The question is whether it would have been better to never have had these additional pandemic jobs at all.
To be clear, I'm not saying there is a single correct answer. Layoffs really do cause damage, and in many cases people left more stable jobs. Still, though, so often I see on HN and elsewhere that layoffs are just the worst thing imaginable and an indication that "management has failed", and I don't agree with that at all. If people are treated with respect (and I'm not really talking about any messaging, I'm talking about if they receive a decent severance), I don't really see a problem. E.g. if someone is hired, say works for a solid 2 years, but then is laid off with say 6 months of severance, I think that person was treated fairly. But I'd probably have a very different answer if someone was hired on for 3 months, made significant changes in their family situation to accommodate that job, and then the company realized they f'd up and panicked, and that person was laid off with 2 weeks severance.
Completely agree, wasn't it Meta that hired a guy from India, who sold everything there and moved to the US only to be laid off a couple of days before starting?
Now that destroys lives and is a dick move.
There is no indication that any of the people that Lenovo hired are part of the layoff. Elsewhere I read that Lenovo have been doing all of the hiring in the R&D dept which was not included in the layoffs.
Not sure I'd classify Lenovo as a durable good in the strictest sense of the word.
I know many who overpayed for a Lenovo laptop only to find, it was intentionally made incompatible with Linux (microcontrollers between core components), the firmware updates from a legitimate source would brick the battery charger, the hardware under limited use would fail within the warranty period (1 year, from GPU overheating), and a number of other issues.
I'll never buy a Lenovo again after this, and my experience has been common based on what others have said. This has nothing to do with the pandemic and everything to do with quality of product that was released at a premium price. They made their sales initially, but they burned their brand down in the process.
Lenovo lost me as a customer when I tried to order a laptop from them, their garbage website refused to work (some random error during the checkout process). I contacted their support for help and to check stock. Never heard back. Several months later they begin spamming me with marketing emails and feedback about how much I'm enjoying my purchase (???).
Not giving them a single cent after that experience.
Lenovo have a problem with their USB C ports. Durability is not good enough for them to be the only source of power. Daily plugging and unplugging breaks them eventually. Accidentally pulling the cable sideways breaks them quickly. We stopped selling them a year or two ago.
> I think it’s much more understandable for software companies, especially subscription based ones to have bet on a “new normal”
Glad someone posted this, I completely agree. After all, there are still many aspects that are a new normal, e.g. the cratering of central business district commercial real estate values reflects this, and many more people are using things like video conferencing than before the pandemic. But durable goods? Did they think we would all remodel our kitchens twice??
In an alternative world where laptops are selling like hot cakes I would say it's because AMD woke people up who hadn't seen enough improvements to justify a purchase since 2012, the wild economy that has people job hopping, and of course the massive power requirements as Meta pushes APIs from the wildly successful metaverse to Facebook feeds.
Yep. It was like in Y2K. I told the companies I was advising at the time that the boom in sales would nosedive afterwards, because everyone used it as an excuse to replace all their kit. They didn't believe me...
About 1. Yes, that. The headline means that even in our current maybe-huge Schrodinger-crisis the company is still profitable, despite being clearly impacted.
It reminds me how this shows the true capabilities of management. You see, if management and economists could do what they claim to do, predict changes in the market and adapt to them.
Well then the 24% and 75% numbers would be the same number. Why? They would have seen it coming, and responded and adapted the firm, before it did this kind of damage.
I've never once seen managers actually succesfully to do this, or even close. I've seen them keeping up hiring and scaling companies right into oblivion though.
I didn't think PCs were part of the "pandemic surge" like Peleton was. If that was true then surely we should see a similar drop in MacBook sales. Do we have any figures on that?
During the pandemic, some of my company's Lenovo laptop orders were backlogged by weeks (or months for a brief period). We had difficulty obtaining laptops for remote employees, even when lowering requirements to "Anything reasonably suitable".
At the same time MacBook Pro's did not have significant changes in order times. I suspect this is because that for large corps, Macs are not as prevalent as Windows laptops. More "specialist" less "commodity".
Personally, I have 10 year old Macs still usable. This message comes from a 2012 MacMini - laptop level hardware. Equivalent age Windows laptops are either Linux (which is also not as corporate common) or our of service.
Yes, but the MBP costs what like 1800 while the Windows laptops corporate is willing to buy often cost around half that or less?
Some of that is surely profit, but some does seem to pay for engineering and part selection of things and methods that don't suck and don't self destruct 2 months past the warranty end date.
Most Lenovo business laptops (thinkpad x/p series) are just as expensive as MacBooks for a business buyer. Maybe the E series are cheaper though.
Though I agree that a lot of employers seem to not even bother with a business line laptop anymore so ThinkPads or MacBooks are out of the question. I'll never understand cheaping out on laptops though. It's an even more bone headed move than not offering drinks or coffee at the office, because employees having to use cheap laptops as their 40h a week tool is just going to hurt the business. That's not even considering the support burden that comes with having a fleet of bad or slow hardware
Macs also have the Apple Silicon effect. My M1 Pro replaced a 2015 MacBook as my primary laptop. Though, in fact, for a lot of things (though not generative art and a lot of multimedia in general), the 2015 system is still fine. Don't expect to need a new laptop soon.
I have a 2021 M1 Pro mac, an iPhone 14 pro and the M1 iPad. I have an oled LG TV and an Xbox series x.
I won’t be looking to upgrade any of those for the foreseeable future.
For the first time in my life I’m sated when it comes to tech.
I’ve always had one eye on the next thing since I was 12 but right now all my devices have reached the point where they are so good I have no FOMO at all.
I have no real interest in VR but will keep an open mind over apples head set.
To be honest if Apple made a fucking toaster I’d probably be one of the losers lining up for it!
My wall-mounted TV is fairly old but dealing with a 65" plasma which would be difficult to dispose of even for money makes me lie down until the feeling goes away.
Could use a new iPad but I used it a lot more when I was traveling more. Maybe again, especially if I do more traveling where I don't need a laptop. Could also replace my 8 year old iMac but works as a web browser and I can do everything on my laptop with external monitor--and there are pros and cons to doing stateful work. on 2 different machines.
Why would it be difficult to dispose of? How did you get it home? You can rent a truck from home depot for pretty cheap and I don't think dumps would deny you the ability to throw away a TV
They most certainly would deny you in Massachusetts (not that my town has a dump; I have a dumpster) and none of the consumer recycling places like Best Buy will take TVs over about 35 inches or so. You'd have to trek around to find a commercial recycler and, at that point, I'm just going to stick it in the back of my garage until the end of time.
In any case a more significant project than I need to take on right now. What I have is fine.
Yeah, I was outfitting a new team in early 2020 at the same time that COVID hit. For us, it was a pain/expense to get computers and monitors. Everybody was kitting up for WFH so demand was high.
I'm surprised their sales haven't dropped even more.
I had an incredibly hard time buying a new Thinkpad earlier this year. Their website is actively user-hostile. It's so incredibly slow that using it makes me yearn for the speeds of a 52k dialup modem.
Their model lineup continues to become more and more baffling, and the utter shittiness of their website makes it a nightmare to navigate the lineup.
Once I did find an acceptable machine, I couldn't fucking pay for it ... for years I've been paying Lenovo by bank transfer, never had any issues with it. But all of a sudden, they've removed the option. And the machine was too expensive for my credit card. Customer support told me to get bent (or to increase my CC limit, one or the other). Which I eventually managed to do, and which works when ordering one machine, but there have been instances where I've ordered ten at a time ...
Once it did arrive, I couldn't help but notice that the latest iteration of keyboards has gotten worse again, the touchpad frequently stops working for several seconds, and the trackpoint starts to drift on occasion. Sigh. Maybe I'm just a grumpy old man.
I agree, their shopping experience was insanely terrible. Tons of models with slight differences in model numbers that all seem like 99% the same laptop. Finally find one that suits my needs and it's more expensive than a new MacBook Pro anyway so why bother.
Additionally, the chance your new $2000+ laptop will be $500 a few months later lightly used on Ebay is really high. So I just wait. My current personal laptop is a nice Thinkpad with an i7 I picked up for $300 on craigslist. Sure the screen feels like it's from the 90s, but it mostly stays plugged into a monitor.
I will continue to purchase from them, but their buying experience is just horrid. Take a page from Apple and consolidate your offerings + offer less customization.
I'll echo your complaints. A recently purchased monitor started going dim and they refused to replace it because it could "possibly have been from physical mishandling" in their words. Just getting to that decision was an ordeal in itself with multiple contact avenues just simply not working.
> Shipments peaked at 350 million for 2021, and PC makers believed that the total addressable market would remain at those heady heights
A global pandemic and forced sheltering in place causes millions of people to buy new PCs for work from home. Lenovo, seeing this, draws the conclusion that all of those people will continue buying new PCs every year, forever? They deserve whatever happens to their business if they're that dumb.
Perhaps they assumed from WFH was going to become the new norm, which would likely result in some continued demand (though certainly less than pandemic levels)
i imagine they expect yearly purchases like apple and iphones, for some reason.
it shouldn't be the norm to throw out Perfectly Working Hardware(tm) like an old pair of shoes, but it's the only thing that generates revenue when you aren't in the business of support contracts for decade old hardware.
that or they saw growth for one year, and thought that it's a permanent increase. either way, The Board is unhappy when Line go Down.
Here's the problem: executives are incentivized to (a) make the stock price go up, and (b) make them go up real fast. This means that if the options are (a) admitting the truth that this was a temporary surge, and thus having a moderate but sustainable increase in the stock price, or (b) pretend this is the "new normal", peloton purchases are gonna grow 40% every quarter, and so the stock should skyrocket _right now_, guess which one they picked.
It's not a bug, it's a feature of stock-value-maximizing capitalism as opposed to true-value-maximization.
PC demand has been falling way before COVID. I guess it has been so since at least 2013. I even remember some people assigning it to windows 8.
Actually, the real reason are changes in usage patterns. Most people today don't have to buy a computer. They can do everything they need with mobile phones, smartv's, smart devices and whatever other device is more adequate.
The explosive rise in popularity of the late 90's and early 2000's was just because a full blown computer was the most convenient device to access the internet. Now that people have options, there are less people buying the device they don't actually need.
What we are seeing, indeed, is that things are going back to what is normal. Most people really don't need a computer.
My home laptop has pretty much become just a web browser, so I have little need to upgrade it, I have a 5 year old Lenovo X1 G6, and it continues to serve my needs adequately. Long gone are the days when upgrading every year or two got you a laptop with significantly better performance… especially for the kinds of workloads that most people use a home laptop for.
> Yeah, sure, I see everyone working from home on their smartphones.
I don't see "everyone working from home".
> All those college kids are writing their term papers on smart TV's, gotcha.
Colleges can provide this demand and not everyone is a "college kid".
With regard to the other points, you can check how pc shipments have been in decline since 2011[1] and how android and ios have been growing during the same period[2]
You've misunderstood my post. I'm not arguing everyone is a working from home or a college student writing term papers. I provided those satirical examples to show that phones are largely an entirely new market, they're by and large not replacing PCs.
Every PC market expert I've ever heard on the subject has a very simple explanation for declining PC sales: the market was growing for decades, and then simply saturated, and now it's pretty much just a replacement market.
The entire fact there was a huge spike in PC sales during the pandemic pretty much disproves your argument. People still need and want PCs and laptops, they simply pretty much all already have them. My bet is that nearly everyone on this site who used a PC 2 decades ago is still using a PC for things like work and writing, it's just now they're also using a phone.
COVID hits, purchasing patterns change dramatically. COVID recedes, purchasing patterns move back towards pre-pandemic norms.
We see this trend over and over and it’s baffling that the execs never saw it coming. Though in Lenovo’s specific case I am curious if there has been a semi permanent shift from office desktop PCs to laptops, now that hybrid and WFH are a lot more common.
It's interesting looking at all the new PC products which were obviously designed ~2 years ago and are not really suited to the current market conditions. E.g. the new AMD CPUs are too expensive, the new AMD + Nvidia GPUs are too expensive, etc. Of course pricing isn't set until just before release but the broad strokes of die size and memory bus width were set long ago. AMD + Nvidia seem to be trying to cling to ~60% gross margin but I don't think they'll succeed.
Lol you have bought 4 in the last 9 years or one every 2.25 years. About as often as I get a new phone. Way more often then I buy a washer, dryer, game console, TV, fridge, car, furniture, etc.
Optiplex 9020's make surprisingly good home servers. I have three, a 2 node proxmox cluster and 1 running as a NAS. The cluster is running 15 VM's including a 5 node docker swarm. I downsized from older HP G1 series in a rack when I moved across country in 2019 and couldn't be happier. Runs everything I need and they were cheap to max out.
Interesting... Why not buy something like this instead?
Granted the M1 mac will be a gazillion times faster and whether or not you actually need that speed for a home automation server is for you to decide, of course.
Given Asahi Linux - there's no situation in which you can compare a dual-celeron to an M1 chip and come out desiring the Celeron unless it's like half the price (tl;dr - it's only $150 cheaper so no).
I'd love to see a Thinkpad with the old thinkpad keyboard, a good ARM CPU (like M1, not like X13S (Snapdragon 8cx Gen 3)), a 4:3 display without all the usual Lenovo bloatware.
This would probably be achievable once framework releases an ARM motherboard. At that point, it's looking more like they'd release an ARM board than a trackpoint keyboard. I can dream...
I remember January 2000 very clearly. After the Y2K panic ended (with a whimper) sales dropped, stocks crashed, and we spiraled into a recession with layoffs and consolidation to follow. It seems we are entering a similar pattern now with the Pandemic panic over, sales drying up, stocks tanking, layoffs and a recession.
The first question a headline like this comes to mind is : What are those PCs (including laptops) being replaced with? Obviously a PC/laptop can only be replaced with another one. So the aggregate demand generated by replacement needs cannot change drastically over the years. I assume this part of the demand will stay somewhat stable with slight ups and downs. Then the other part of the demand is the demand for new laptops. Which also cannot change a whole lot unless there is a drastic increase in population. So the remaining part of the demand that happened due to remote work/class requirement - that may contribute to the decrease as demand for that wane as folks go offline again. But that itself cannot contribute to 75% profit sink. A headline like this does nothing but spread misinformation and I wish there was a way to legally ban them. At least HN moderators can do their part by not boosting these time of meaningless article by using a little part of their cerebrum cortex.
> What are those PCs (including laptops) being replaced with?
It's the equipment version of a "staycation" - you keep your older kit and save your money. Windows11 requirements are quite low (1Ghz/4GB RAM/64GB Storage). macOS has ever increasing requirements but there are workarounds to keep some older but not decrepit machines operable [1]. And there's always Linux for the rest.
Also just like cars - I'm sure the used market is thriving.
My 8 year Acer is on it's last legs. I need to a new laptop. But the fear that I will be laid off for the second time in a year tells me I need to hold off until... who knows when.
You are heavily downvoted, but I think you’re right. The Windows + Intel combo appears to be in serious trouble for the PC and laptop markets.
The main problem I see is the slowing of Moore’s law and Dennard’s scaling. It used to be that you didn’t have to innovate on a laptop. You only needed to get the state-of-the-art chip on board to beat the competition. This is less so nowadays as can be seen from the Apple laptops which have improved on all layers on the stack. The newest Intel or AMD laptop doesn’t necessarily beat a 2 years old Apple laptop performance and usability wise.
Regarding Windows, Microsoft does care according to the build conference from yesterday: they announced plugins inside Windows and other cool new features. However, according to Nadella, Google makes more money on a typical Windows laptop than Microsoft does. I think this partially explains why Windows seems to have stalled innovation wise.
> Google makes more money on a typical Windows laptop than Microsoft does
I hadn't thought about it, but that's absolutely true! When you think of the Adsense network and the amount of money Google is making by typical consumer browser behavior, Google is making a lot more money than Microsoft on a typical Windows laptop.
The OS is now a commodity. Microsoft needs a new strategy.
> However, according to Nadella, Google makes more money on a typical Windows laptop than Microsoft does. I think this partially explains why Windows seems to have stalled innovation wise.
This is why MS is, and has been for a long time, desperate to get into the ads space. They have continually failed.
There is also the PR/image aspect. Google can non-stop show ads for Google products on Android and no one bats an eye, Microsoft asks people if they want to store files on OneDrive (which is a really nice service!) and people freak out about evil ads in Windows.
I don't see any ads outside of the app store on Android (and obviously the web browser). Microsoft puts them in the start menu which seems very different to me (I would be very angry if Android put them in the launcher). I do customise my set up a great deal so I am curious to know if your experience matches mine.
I'm in the market for a new personal laptop. At work for the past 7 years I've been using ChromeOS devices. At work currently I have an M1 MacBook Pro 16. In the past, I'd been running Linux on x86 essentially since Windows XP.
In reading the current state of things (and seeing how craptastic Windows 11 is on my son's Lenovo X1 Carbon), I actively do not want to buy a Windows machine. There are very few hardware vendors that seem to actually give a crap about providing a high quality product & user experience, and - although I was fanatical about my Thinkpad T40 back in the day - I've become jaded by my Pixelbook that "just works", and now my MacBook.
I don't believe, because only Google & Apple are able to control the whole stack, anyone building Windows-based laptops is actually able of creating the level of quality & polish consumers would like to see. That's said, but not unexpected. Microsoft & Intel should have anticipated this.
PC demand had always been a mystery to me. Ok, fine, I have to compile a lot of code and sometimes run k8 on my 4-year-old Linux laptop, but who else needs a powerful PC besides gamers(who mainly use consoles anyway) and graphics designers? ML is cloud-based these days, right?
Have you seen modern CAD software? That's pretty compute intensive. That's just one of many tools in the engineering space that is compute intensive. Remember, there are a lot of engineers!
Movie making and editing is still pretty compute intensive, as is animation. Thanks to YouTube, a lot of people have video editing work streams and they're looking for ways to get their work done faster and make their content stand out so that viewers will click those 'Like' and 'Subscribe' buttons so that they make more money.
Music making is getting more and more compute intensive, especially nowadays as all the what once were physical processors in the signal chain are all being virtualized. Add in amp simulators, cab simulators, AI drummers, and of course nobody wants any latency, and you need some modern processing muscle to make it all work.
Apple makes the Mac Studio for a reason - and it's not for gamers!
As far as developers are concerned, no, you don't need much horsepower to "compile a lot of code", but you may need a lot of horsepower to run that code if it's in one of the aforementioned software categories.
I understand this point, and I agree. What I am saying is that number of creators is tiny when compared to the number of consumers. IMHO the demand for creator tools is too high considering all you need to consume is a browser or tablet, or game console
CAD as the other guy points out, video editing/rendering, 3D modelling and animation for gamedev/movie industry, crypto mining. ML is so niche it's a rounding error.
Ok. So what is your theory about the declining market for PCs? The only other thing I can think of is that companies bought tons of laptops for remote workers during lockdowns, which did not last as a trend.
Well yeah duh, the shortages were not only from the lack of production, but also from sudden demand as everyone started WFH. All of those people haven't broken their brand new laptops in 2 years yet. There was also government stimulus worldwide which lots of people used to buy new computers.
Overall I think there's also a slight decline in desktop/laptop usage as a whole, as younger people grow up doing everything on touch devices instead, but that's more of a slow generational shift.
>but who else needs a powerful PC besides gamers(who mainly use consoles anyway)
1. Gamers depend on market and games. Have fun playing CSGO2 on a console.
2. If you even do web browsing, youtube/netflix and documents work on a PC its nice to have a beefy one that does not lag. You can skip the GPU but a nice i5 or i7, 32GB RAM and big SSD is really nice to have and use. Plus all the extras.
The non-technical people use PCs. Macs are extremely expensive for an overwhelming majority of the world population. So when someone needs a 'computer', its a Wintel laptop.
Depends. A lot of techies still use Windows (AMD or Intel, depending), including in Europe where the purchasing power is higher. Apple people seem to be a certain subsegment of computer users even in Europe, and they may not necessarily constitute the large part of any significant engineering segment anywhere - unlike the US, where Apple usage is quite high in certain subsegments among the technical people.
Normal people around here (W Europe) dont even know about 'Windows'. They know about their 'computer'. And 'the Internet', which is actually the web browser in their laptop. These are not uneducated dumb people either. Any normal, non-techie person, including other white collar professionals. They mostly know about various software that is heavily used in business though - Excel, Word, Powerpoint etc. Or SAP etc, if they are more specialized professionals.
...
What Im thinking is that the reduction in demand of computers and laptops is because existing hardware has developed quite beyond the needs of the majority of users. An average, 75%ile gaming laptop that comes in for ~1500-1700 euros these days, is capable of running most AAA games with good quality visuals and performance. They are capable of running any game from the last decade and earlier. And they are as cheap as an equivalent desktop - which may or may not bring any visible performance and quality improvement. This is the most taxing application that the majority uses and other stuff like business software are in no way anything demanding compared to these, so why someone who bought a new laptop 2-3 years ago need another one today...
This could only change with a new paradigm like consumer-grade, locally installed AI applications or virtual reality bumping up the hardware requirements. Or, through (probably soon to be illegal) planned obsolescence.
> Gaming laptops are terrible and a bad deal... They will. Either cheaper or better performance for same price.
I found them pretty competent. An Asus ROG G17 easily gives at least ~80% performance of what the components would give if they were in a desktop. (RTX 3070, Ryzen 9). And does it with almost ~50% less power consumption...
I halfway want a macbook for my next laptop for this reason, but I find the plastic thinkpad chassis more comfortable, and the data recovery story for macs with a bad cpu/ram is bad.
It may or may not. I've often wondered how much sliding demand for PC's is due to an increase in sales of Apple products. Unfortunately, the entire decades long infatuation with these sales figures relies on Gartner, which I believe was bought off in the early 90's by Microsoft. The critical piece of information that would make these figures useful is what percentage are corporate purchases, and that's the part that's never been reported in all the 30 years I've been watching. Every time I bring it up here, my question is ignored, and I can't figure out why no one else is curious about this.
1. Journalists love to headline percentage profit declines, because it's a bigger number, but large companies often have big swings in profitability. Revenue changes are much more important, and the article states the revenue was down 24%.
2. I'm still baffled that this can be remotely surprising to anyone. All these "pandemic surge" companies (think Home Depot, Lowes, Peleton, and here Lenovo with laptops) had to have known this was just temporary. I mean, they sell durable goods, and obviously the pandemic pulled a ton of demand forward (as well as added demand). Nearly every kid in the country needed a laptop for remote school during the pandemic. How on earth did anyone think that demand could continue?