The US-China trade war made Lenovo stand down, warning that the selling price of laptops will become more and more expensive

Lenovo Group is also the world’s largest PC manufacturer, warning that it will likely have to raise prices for laptops if the US continues to impose tariffs on its products.

The warning of Lenovo is given in the context of the business situation is increasingly fierce and the US-China trade war has never come to an end. This makes Lenovo doubt about the prospect of quarterly sales which may be lower than forecast.

Not long ago, US President Donald Trump said he would postpone the application of 10% tax on some goods from China such as tablets and laptops until December. However, the company still applied tariffs on the desktop from January. 9.

That’s why Lenovo is so worried. Yang Yuanqing, chairman of Lenovo, said: “Retail prices for products such as PCs and smartphones will increase if US tariffs continue to increase. Although we can leave the factory to other places, but only production costs will be higher “.

He stressed that moving production from China to other countries to avoid US tariffs would also lead to an increase in product prices, even if Lenovo is flexible in adjusting its production line.

Earlier in May, Yang confirmed that although the company’s PC and mobile businesses were not affected by US tariffs on imports from China. However, Lenovo may have to adjust its production chain if the US plans to expand its tax-imposed list.

Analysts said the global PC market rose 1.5% in Q2 / 2019 after falling for two consecutive quarters. The cause of decline is indicated by the US threatening to raise taxes on Chinese goods, causing some manufacturers to shift their chains to other countries.

Lenovo has emerged as the world’s largest PC maker, which has also recovered some of its sales in Q2 / 2019. Citing data in the industry shows that the company is accounting for 25.1% market share in Q2. Lenovo is also the fastest growing PC maker in the top 5 manufacturers.

Revenue from PC and smart devices business grew 12% while its mobile business recorded a record decrease of 9%. Lenovo’s smart PC and device business also accounts for three quarters of Lenovo’s total revenue, up 5%.

The company estimates it will achieve net profit of 162 million USD in Q2 / 2019, higher than the previous estimate of 154 million USD of many analysts.

Lenovo currently has manufacturing plants in Mexico, India and many other research centers around the globe. This could be an effective supply in the context of trade conflicts between the US and China.

Speaking after the recent financial results report, Yang reaffirmed the idea that trade war is not good for the industry and Lenovo wants the Chinese and US governments to reach a commercial agreement soon. save the situation.

Refer to Abacusnews