Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
MORRISVILLE, N.C. – As Lenovo has charged past Acer to become the world’s No. 3 PC maker and closes in on No. 2 Dell, the company is taking some public relations and financial hits on its home turf.
Like a headline on Tuesday calling its LePad tablet “iBad” vs. Apple’s iPad.
Ouch.
Lenovo launched a tablet, the LePad, and a smartphone, the LePhone, to counter Apple’s iPads and iPhones. But so far each has performed abysmally, writes Peh Shing Huei for Strait Times Indoesia in a report datelined from Beijing.
“A name that’s an obvious rip-off,” Peh writes dismissively even of the LePad name.
Lenovo has gobbled up the top PC manufacturer and electronics firm in Germany and is launching a joint venture with NEC in Japan while rolling out new laptops, tablets and PCs at breakneck speed around the globe. But Apple (Nasdaq: AAPL) is eating into Lenovo’s business in China where Lenovo dominates and does most of its business.
Apple tops Lenovo in China-Hong Kong-Taiwan?
On July 22, for example, Bloomberg reported that Lenovo’s combined revenue in China, Hong Kong and Taiwan last quarter lagged behind the $3.8 billion for Apple, according to four analysts. That trend has to have management in Morrisville and Beijing worried.
Wrote Peh on Aug. 9, seemingly supporting that conclusion: “[A]fter abysmal first-quarter sales, it is fizzling out as yet another pretender” in a story headlined: “iBad: Lenovo’s ‘iPad killer’ Fails to Take Off in China”
According to Peh, Lenovo sold “just 30,000 LePads.” Sales of the LePhone are also struggling while Apple iPad and iPhone sales soar. Apple products are so popular in China now that entire counterfeit Apple stores have been built.
“For the Chinese people, an Apple product is also a status symbol,” analyst Shen Sui of iResearch Institute, said, according to Peh. “The iPad looks good and carrying it makes users look like they are from a higher social class.”
Criticism of Lenovo has come even from the hometown press.
“Both Lenovo products were blatant copycats of Apple’s,” Peh wrote, “leading even the conservative People’s Daily to remark sarcastically on its website that “one could say Lenovo is Apple’s most faithful imitator.’”
Wow. Now that’s quite a stinging rebuke, especially in a country where press freedom is an oxymoron.
Haunting words from Lenovo’s chairman
Lenovo Chairman Liu Chuanzhi must be regretting what he said in July of last year about Apple and CEO Steve Jobs.
“We are lucky that Steve Jobs has such a bad temper and doesn’t care about China,” Liu told a London newspaper. “If Apple were to spend the same effort on the Chinese consumer as we do, we would be in trouble.”
Well, Jobs obviously cares now.
Liu said when LePad launched that the he knew the stakes were high for him and the company which he founded.
“We have an extreme focus on the innovation of LePad and LePhone because these products will dominate the future market,” Liu told Bloomberg at the World Economic Forum in Switzerland. “Anyone who loses this battle will be phased out from the history of this industry.”
However, he was very confident at the time that Lenovo would be able to compete.
“History has proved we are good at catching up with the market’s leaders,” Liu told Bloomberg. “Though Apple is winning a significant share in the Chinese market, it has not gained a clearly leading position yet. Our advantage is we know this market better.”
The question for today is if what Liu said is still true.
Peh’s story doesn’t write off Lenovo’s chances of beating Apple. But who would have thought that Jobs and company could conquer so much of China so soon?
Read Peh’s full report here.
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