Bloomberg News

Lenovo’s Says RT Tablets Up to $300 Cheaper Than Win 8

August 16, 2012

Lenovo Group Ltd. (992), the world’s second-biggest maker of personal computers, said new devices based on Microsoft Corp. (MSFT:US)’s Windows RT software will cost $200 to $300 less than competing products using Windows 8 software.

Microsoft plans to release two versions of its new operating system this October to bring a new touch-screen interface to computers and tablets that will better help it compete against Apple Inc. (AAPL:US)’s iPad. Windows 8 works on chips made by Intel Corp. (INTC:US) and Advanced Micro Devices Inc. (AMD:US) while Windows RT works on ARM Holdings Plc (ARM) technology-based chips, a standard that dominates in mobile phones.

“RT will play in consumer and retail at very aggressive price points,” said David Schmoock, head of Lenovo’s North America operations. “It will do well but it’s going to be more of a consumer price point play to begin with,” he said, in an interview today.

Windows 8 has more compatibility with other Windows software, making it more attractive to corporations, while Windows RT will “be a very good consumer box,” Schmoock said. Windows 8 tablets will cost $600 to $700, he said.

Separately, the Intel Corp.-led push to make notebooks more attractive to consumers with thinner and lighter devices it’s branding Ultrabooks, may struggle to meet the chipmaker’s goals this year, according to Schmoock. Intel has said the devices are on course to account for 40 percent of consumer-notebook PCs by the end of this year. Schmoock estimates that they are more likely to grab a 20 percent to 25 percent market share.

Intel’s Ultrabook

Success of the initiative will depend on how quickly computer makers can bring down the price of the products, he said.

“It’s going to require a very strong first couple of weeks of launch of Win 8,” said Schmoock. “They’ll be a lot bigger than they are now. I don’t know if it will get all the way up to 40 percent.”

Intel “always sets aggressive” targets, Kari Aakre, a spokeswoman for the Santa Clara, California-based company, said. “We’re not backing off our goals,” she said in a telephone interview.

“We think Ultrabook is the best solution for what consumers want.”

Lenovo reported a 30 percent increase in profit in the three months ended June 30, as sales increased faster than the overall personal-computer market and came closer to taking Hewlett-Packard Co. (HPQ:US)’s No. 1 spot.

Lenovo, which has headquarters in Beijing and Morrisville, North Carolina, gained 6.3 percent to HK$6.60 in Hong Kong trading, the highest since June 22. The stock has risen 27 percent this year, surpassing the 8.3 percent gain for the city’s Hang Seng Index.

Lenovo’s market share rose two percentage points to 14.7 percent in the quarter, almost matching Hewlett-Packard’s 14.9 percent, Stamford, Connecticut-based Gartner Inc. said July 11.

To contact Bloomberg News staff for this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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