Lenovo sets expectations for tablet market

A man displays an unannounced Lenovo tablet computer running the full Windows 7 operating system at a preview of the Consumer Electronics Show (CES) in Las Vegas January 4, 2011. According to a spokesman at the show, the computer, scheduled to be available in May, has a tentative name of the IdeaPad Slate, uses the Intel ''Oak Trail'' 1.6gHz processor chip and has a 32gb SSD drive and a microSD slot.

Credit: Reuters/Rick Wilking

By Gabriel Madway

LAS VEGAS | Fri Jan 7, 2011 4:10pm EST

LAS VEGAS (Reuters) - Lenovo Group Ltd, 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 Windows, with a 10-inch touchscreen tablet -- which runs Google's 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 and 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)