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2009/10 Annual Report Lenovo Group Limited
26
MANAGEMENT’S DISCUSSION & ANALYSIS
The worldwide PC market has shown signs of
improvement in the last several quarters, and it is likely
that PC demand in China will remain strong as it will in
most emerging markets, but there remain challenges
that render the macro environment uncertain. While
there are some promising signs of corporate refresh,
commercial spending will likely improve gradually in the
new fiscal year. Consumer demand has been the key
driver for worldwide PC market growth for the year,
and its growth momentum will likely remain. Meanwhile,
the ongoing shift of product mix towards low price
bands within consumer PCs will remain challenging as
it continues to exert downside pressure on the average
selling price.
FUTURE
PROSPECTS
In addition, as demand for PCs continue to improve,
supply constraint in certain key components, such
as memory chips, panels and others, will continue
to impact production. Component price increases
could constrain margins in the new fiscal year even as
suppliers increase capacity. Furthermore, volatility in
global currencies, like that experienced during the last
several quarters, could cause additional challenges for
PC makers including Lenovo.
The Group will continue its fundamental “Protect
and Attack” strategy that contributed to the Group’s