Lenovo recently launched its new LaVie Z laptops, which were developed in collaboration with NEC and introduced at CES 2015 in January.The super-lightweight LaVie Z laptops are notably lighter than Apple's new MacBook. Lenovo attributes the weight difference to the LaVie Z's magnesium lithium frame, which is lighter than the MacBook's aluminum chassis.
Lenovo's LaVie Z. Source: Lenovo.
Will Lenovo's new line of ultrathin devices steal Apple's thunder, or are the two companies targeting different markets?
By the numbers: LaVie Z vs. the new MacBookLenovo's LaVie Z is actually pricier than the base model of the new MacBook, but it also sports a larger, higher-resolution display and beefier processor.
Source: Company websites.
The higher-end $1,599 version of the new MacBook has a slightly faster 1.2Ghz Core M processor and 512GB of internal storage.
Customers who want more horsepower in a lighter package might prefer the LaVie Z, but it's a pricey package at $1,499. Lenovo is also offering the LaVie Z 360, a version with a touchscreen that can be folded back into a tablet, for $1,699. The LaVie Z doesn't really crush the new MacBook in terms of price vs. performance, but it's still a viable alternative to Apple's MacBook in the market for premium laptops.
The growing market for ultramobile premium devicesBoth the LaVie Z and the new MacBook belong to a growing category of "ultramobile premium" devices.
Research firm Gartner estimates that global shipments of ultramobile premium devices will surgefrom 36.7 million in 2014 to 90.9 million in 2017. During that time, their share of the global PC market could rise from 12% to 28%. That growth is impressive, considering that Gartner expects annual PC shipments to rise just 4% during that period.
Meanwhile, smaller and more power-efficient chips -- like Intel's fanless Core M chips -- have made it easier to manufacture thinner devices. This means that PC makers looking to escape the sluggish growth of the "traditional" desktop and notebook market will continue launching more ultrathin laptops at premium prices.
The guts of Apple's MacBook. Source: Apple.
What this means for Lenovo and AppleLenovo and Apple would both benefit from higher sales of these premium devices.Lenovo, the world's largest PC maker, saw its global market share climb from 18.5% to 19.9% between the fourth quarters of 2013 and 2014, according to IDC. During that time, Apple's share rose from 5.8% to 7.1%, making it the fifth-largest PC maker in the world.
Last quarter, Lenovo's PC revenue, which accounted for 65% of its top line, rose 5% year over year to $9.1 billion. Apple's Mac revenue, which accounted for nearly 10% of Apple's total sales, rose 2% annually last quarter.
For Lenovo, stronger sales of ultramobile premium devices could offset weak demand for traditional PCs. Its growing mobile division, boosted by the acquisition of Motorola Mobility's handset division last year, could complement that growth. Meanwhile, Apple needs rising Mac sales to diversify its top line away from the iPhone, which accounted for 69% of its revenue last quarter.
Similar devices, different marketsPlenty of tech sites are calling the LaVie Z laptops "MacBook killers". Although LaVie Z laptops are certainly lighter and more powerful, they won't directly threaten Apple's Mac business for a simple reason -- brand appeal.
Apple's MacBook. Source: Apple.
Apple has become a luxury brand across the world. A recent survey bythe Hurun Research Institute found that Apple was the top luxury brand for gifting among China's richest men and women last year, beating out brands like Louis Vuitton, Chanel, and Prada. Apple was also the only electronics manufacturer on the list. That brand appeal lets Apple get away with selling "average" hardware at high margins.
By comparison, Lenovo is better known for its "workhorse" ThinkPad brand, which it acquired from IBM over a decade ago. The LaVie Z, while elegantly designed, still bears a strong resemblance to those mainstream enterprise laptops.
This means that for Lenovo to go head-to-head against Apple in the premium market, it must offer beefier hardware, which reduces margins. Even if it does, there's no guarantee that its devices can directly compete against Apple's brand appeal.
The key takeawayLenovo's LaVie Z laptops are an interesting addition to the ultramobile premium market, but they're not pursuing the same market as Apple's MacBooks. Considering how large the high-end market is today, there's still plenty of room for Lenovo, Apple, and other companies to all launch new premium laptops without stepping on each other's toes.
The article Will Lenovo Group's LaVie Z Crush Apple, Inc.'s New MacBook? originally appeared on Fool.com.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple, Gartner, and Intel. The Motley Fool owns shares of Apple and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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