“The Impact of Covid-19 on Personal Computer Sales and Lenovo’s Strategy for Recovery”

In recent years, manufacturers have been used to the fact that demand is practically constantly growing. The covid-19 pandemic also contributed to a significant boom in electronics sales, as people spent more time at home due to restrictions and looked for ways to entertain themselves.

The subsequent easing of anti-coronavirus measures significantly dampened demand, which understandably had a negative impact on sales figures. The research company IDC reported that during the first quarter – the period from January to March – there was a 29% decrease in sales of personal computers.

Only 56.9 million units were sold globally. This figure is even lower than in the period before the pandemic in 2018 and 2019.

The unenviable situation on the personal computer market is also confirmed by Lenovo’s economic results. The profit of the Chinese company, which boasts the title of the largest computer manufacturer in the world, fell by 21 percent to USD 1.6 billion (CZK 35.2 billion) last year.

This decrease is the first decrease in sales since 2019. It is therefore evident that it is related to the drop in demand after the cancellation of anti-coronavirus measures.

Total revenue fell 14 percent to $61.95 billion last year, while pretax profit fell 23 percent to $2.1 billion. However, CEO Yang Yuanqing said that “in the second half of this year, Lenovo expects the market to recover again.” By all accounts, he is looking forward to better times.

Due to unflattering economic results and forecasts for future development, Lenovo decided to reduce the number of employees by eight to nine percent in the last quarter of last year.

However, Lenovo is trying to improve its financial situation by focusing its activities outside of personal computers – it wants to focus more on smartphones, servers and technology services. The non-PC division saw a seven percent increase in sales last year, and its share of total sales is 40 percent.