Business

Lenovo to raise prices
up to 20 percent

PT Lenovo Indonesia, the domestic unit of the China-based device manufacturer, plans to raise the prices of its personal computers (PC) by up to 20 percent to cope with skyrocketing import costs caused by the depreciation of the rupiah against the US dollar.

Lenovo Indonesia chief operating officer, Sandy Lumy, said that the prices of Lenovo PCs across all market segments would go up because the import costs for the products were in US dollars.

“We will adjust our prices upward by 10 percent to 20 percent in accordance with the latest exchange rate,” he said.

Lenovo Indonesia imports its PCs from China, the parent company’s manufacturing center for supplying the Asian region.

The Indonesian rupiah has weakened by 16 percent against the US dollar this year, most of the fall having taken place in the last two months due to massive outflows of foreign funds from local equity and debt markets.

Sandy added that the increased prices would apply to all newly shipped PCs. The prices of older products already sitting in warehouses and stores, however, would remain unchanged.

“We are currently in a transition phase. Our new supplies already carry updated prices while the older stock still carry previous prices,” he said, adding that Lenovo generally kept their inventory time below seven weeks.

“So, for those looking to buy a new PC, now would be a good time,” he said.

Sandy said that the ascending prices would cause people to hold back purchases. However, the “shock” was expected to be temporary.

“This is based on our experience during the fuel hike. Demand waned temporarily, but eventually people have to purchase computers, which have become a work necessity,” he said.

“Besides, all those in the information and communication technology industry will also be raising their prices, so a new price level will form,” he said.

Indonesia contributes approximately 35 percent – the highest – to Lenovo’s sales in Southeast Asia.

Earlier this year, Lenovo replaced Hewlett-Packard (HP) as the number one global PC maker based on units shipped, according to data from the International Data Corporation (IDC). By the second quarter of 2013, Lenovo had a 16.7 percent share of the global market, while HP had 16.3 percent.

Sandy added that the company expected purchases to return to their normal level in the fourth quarter of the year as commercial buyers, in addition to enterprises, conducted their traditional year-end buys.

“The months between October and December are usually festive, as small and medium enterprises [SME] as well as big businesses finish out their annual budgets,” Sandy said. “We hope that this year’s fourth quarter will remain robust.”

Lenovo serves two PC markets with their products. The ThinkPad is designed for the commercial market while the IdeaPad is designated for enterprise-level users.

Paper Edition | Page: 14

Post Your Say

Selected comments will be published in the Readers’ Forum page of our print newspaper.