Lenovo to Relinquish Final Assembly and Outsouce

Quality Issues?

BN 20:48 Lenovo to Start Assembly in Taiwan, Economic Daily News Reports


By Tim Culpan
Jan. 21 (Bloomberg) -- Lenovo Group Ltd. will start
contracting Taiwanese companies to assemble and ship its notebook
computers, the Economic Daily News reported today, citing Zhang
Hui, the company's vice president.
Lenovo previously had some manufacturing done by Taiwanese
companies and did the final assembly and shipping itself, the
Taipei-based newspaper reported Zhang as saying.
The new policy will benefit the world's four largest notebook
computer makers, Quanta Computer Inc., Compal Electronics Inc.,
Wistron Corp. and Pegatron Technology Corp., the newspaper
reported, without saying where it obtained that information.
Lenovo is the world's fourth-largest computer company, behind
Hewlett-Packard Co., Dell Inc. and Acer Inc., according to
research company Gartner Inc.

--Editor: Stan James, Joost Akkermans

 

Watch the already falling quality to drop even faster.

 

Hey guys, everything has a beginning, so everything has to end, one way or another, to bad it has to be this way.

 

So the only non "shared" notebook now is the toughbook? The thinkpad as we know it, is now dead.

 

Is it really a bad move? I don't think so. The manufacturing has been outsourced long time ago, and now they just want to give up the last piece (i.e. the assembly).

Maybe it won't take that long anymore to wait for your order to be shipped.

 

By the way, I just checked the source of the news (Economic Daily News in Taiwan).

The report mentions that the new IdeaPad U110 (11" LCD) will be around $2,000 USD.

 

I don't really see this as a bad move - if anything it'll be better. Taiwan isn't exactly the armpit of tech manufacturing. Guess who makes all those motherboards?

 

Thinkpads have always used proprietary motherboards and some components, thus they had some uniqueness in the market. I see this as the precursor to the thinkpad becoming like every other quanta (i.e. HP, Dell etc) notebook on the market. Lenovo is making this move to take advantage of using standardized ODM motherboards/components which will reduce manufacturing costs significantly. Research, engineering and component costs can be cut significantly by going this route. Why do you not think that Lenovo will not take this into account when designing future products?

 

BFD. Taiwan already produces heaps of laptops for HP, Dell, Toshiba and others to begin--even the expensive stylin' laptops everyone and their dog wants but doesn't want to admit where they were sourced from.

 

Maybe TP's will come preloaded with OS/X...

 

When will this outsourcing start? What's the latest I can buy a laptop and feel safe (assuming the quality actually does go down)?

 

you guys are confusing me, as I personally take this as an excellent move of Lenovo to further improve their product quality. You do realize right now most, if not all of the thinkpads are made in mainland China right.

 

I have the same thoughts as aviso. It was my impression that Thinkpads were already assembled by Compal. See: http://investintaiwan.nat.gov.tw/en/news/200604/2006042001.html

Since Quanta is generally considered the best quality ODM, this may be an improvement.

And I figure the notebooks will still be assembled on the mainland, since that is where Taiwanese companies actually do their manufacturing.

 

This is Correct.

 

I agree - I think this is probably a positive move in terms of build quality. What some are worried about is that all the brands will be made at the same place, use the same motherboard, same parts, etc. Just a different shell and logo for Dell, HP, Lenovo, and on. Kind of like what HTC has done in the Mobile PC smartphone/pda market.

 

I think there is a slight confusion. The notebooks will still be made in mainland China, but in ODM manufacturing facilities rather than Lenovo's own. Also probably means inventory, shipping and parts will be managed by the ODM rather than Lenovo. This is what HP has done to streamline its manufacturing and build-to-order processes.
Being built in China doesn't equate to a drop in quality automatically. It depends on how much Lenovo is willing to pay the ODM and the more they do, better QC processes will be adopted. At the current state of the PC business, no name-brand maker can afford to pay for higher quality build because margins are tight and it won't pay off in the long run (because product turnover is too high to justify the costs).

 

Lenovo Not Moving Laptop Production:

We just got word from Lenovo that the Digitimes-originated story we ran yesterday about laptop production leaving China is completely false. Somehow it got out that Lenovo was moving all its laptop production to Taiwan, but apparently that couldn't be further from the truth. Lenovo isn't sure how the story got twisted in such a way, but assumes translation somewhere down the line was to blame.

http://www.engadget.com/2008/01/22/update-lenovo-not-moving-laptop-production-to-taiwan-anywhere/

 

Just as I mentioned above.

 

That's too bad, I'm betting it would have helped shrink the order to delivery time and improve quality.

 

The original report only said that the final-stage assembly would be outsourced to "Taiwanese" companies. Taiwanese companies do not necessarily mean that the plants/sites are in Taiwan. So the report actually didn't say anything about moving the production to Taiwan.

Taiwanese companies dominate the market of laptop manufacturing by 90% and almost all of them have their (major) sites in China. It doesn't make sense to move back to Taiwan, as the labor cost in Taiwan is much higher than in China.

 

This would have been a surprising change, if it were true. Lenovo is 30% owned by the Chinese government, and I don't think they are big fans of Taiwan...

 

Yes but on a bill of materials basis, almost all notebooks are mostly American. Intel or AMD, Nvidia or ATI or Intel Integrated. American engineering and ingenuity. Rest of world is based on cheap labor or replication. Top PC cos globally still HP and Dell. GO USA! America #1. Lead in: technology, economically, military, philanthropy, among other important categories. World's #1 superpower.