Marbridge Daily reports:

Vice president Zhang Hui of Lenovo’s (0992.HK) global consumer notebook division revealed recently that the company intends to change its notebook assembly strategy, moving from the old model, in which notebooks were produced at EMS plants in Taiwan and assembled and shipped out by Lenovo, to a new model under which assembly and shipping will be handled by the EMSes.

HP and Acer have both switched the handling of assembly and shipping to their Taiwanese EMSes.

EMS stands for electronic manufacturing services. They’re the companies that actually make the components and solder the circuit boards. Vendors (such as Lenovo, Apple, Sony, etc.) design, spec, assemble, and sell them.

Lenovo used to be pretty proud of the “old model”. From purchasing.com, just this last October:

…Lenovo’s is not an outsourced manufacturing model like some PC makers—about three-quarters of Lenovo’s manufacturing is done at its 10 plants around the world. In the cases where Lenovo does use contract manufacturers or EMS providers, it’s typically only until the production can be transferred to a Lenovo plant under construction or in areas that it doesn’t make sense from a tax standpoint or tariff perspective.

“We feel that it’s important from a cost perspective as well as a control perspective that we get more of a manufacturing footprint in place in various geographies,” Smith explains.

The Smith quoted is Gerry Smith, Lenovo’s global supply chain boss and former Dell employee

Those sentiments don’t extend to laptops, apparently. Not when the consumer laptop market is expecting significant growth globally in 2008. China is part of the same trend. From CCID Consulting, via Tekrati, some astonishing market numbers:

According to statistics from CCID Consulting, from January to October 2007, the sales volume of Notebook PCs was 4.755 million, a year-on-year growth of 44.2% over last year. The sales volume of Notebook PCs in 2007 is looking like it will reach 6.155 million.

With that in mind, Lenovo introduced the “Ideapad” consumer laptop at the new year to complement the Thinkpad. By expanding the number of EMS suppliers and offload assembly and shipping to them they could double their capacity. From EMS Now:

Because of the increase in the production of the consumer-type NBs, Lenovo said it would see shipments of such products double year-on-year in 2008 with shipments growing from 400,000 units to one million units.

And they aren’t the only ones who are doubling capacity. Marbridge Daily reported:

Founder Technology Group CEO Qi Dongfeng has revealed that Founder has set a sales target of 800,000 notebook computers, or 10% of the notebook market, for 2008. During the coming year, Founder plans to support 30 to 50 large-scale sales partners with sales in the hundreds of millions of yuan, while also helping second-tier retailers develop markets. The Founder Group will give Founder Technology Group RMB 200 mln to support promotions.

The RMB200 million will make for a nice little war chest. They’ll need it. Lenovo dominates the China laptop market while Founder is a second tier player. Computing magazine, quoting an Analysys report:

[In Q1, 2007] Lenovo remains China’s largest notebook PC maker by a substantial margin. The company held 34.1 per cent of the market by shipment volume, according to data for the first quarter.

Almost all other major players in China’s laptop market are foreign firms, although several local start-ups are increasing their sales.

HP pushed its share slightly to 12.1 per cent of the market, followed by Dell at 9.1 per cent. Asus and Acer both hold approximately eight per cent.

Among local firms, Founder holds 5.1 per cent and notebook market newcomer Haier has 3.3 per cent.

All the ingredients for a nice little price war. 2008 should be a good year to buy a laptop.

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