BEIJING – Lenovo Group expects wireless Internet products to account for up to 80 percent of its sales within five years as it pursues expansion in faster-growing emerging markets, CEO Yang Yuanqing said Friday.
Lenovo, the world's fourth-largest personal computer maker, jumped into the mobile Internet market in January with the unveiling of a smart phone and two Web-linked portable computers.
"Mobile Internet is very important," Yang said in an interview. "Even today, notebook sales already are higher than desktops. Mobile Internet products are going to be 70 to 80 percent of our sales ... within three to five years."
Yang said Lenovo plans this year to focus on promoting mobile Internet and sales in emerging economies in Asia, Latin America and Eastern Europe.
Lenovo, based in Beijing and Morrisville, North Carolina, was hit hard by the global crisis, which prompted its core corporate customers to slash spending. It suffered three losing quarters before rebounding to a profit in the second half of last year.
Yang said Lenovo's longer-term strategy, dubbed "protect and attack," calls for building up its dominant presence in China. The country accounts for nearly half of Lenovo's global sales but it faces competition from industry leaders Hewlett-Packard Co. and Dell Inc., which are creating products tailored to Chinese customers.
In the latest quarter, Lenovo said sales in India and other emerging markets rose 52 percent over a year earlier, far ahead of the 13 percent sales growth reported for the United States and Western Europe.
Lenovo, which acquired IBM Corp.'s PC unit in 2005, says its global market share last year rose to 9 percent, its highest level to date.
Yang said Lenovo has no plans for foreign acquisitions but is ready to look at any deals that fit its strategic plans.
Corporate spending on computers has yet to rebound but companies are expected to step up purchasing in the second half of this year, Yang said. He said he could not foresee when global PC sales might recover to pre-crisis levels.
"I'm not an economist," he said. "Even for economists, it's difficult to forecast."
JACUMBA, Calif. – A Toyota executive said Thursday the company is "mystified" by a report that a California man's Prius gas pedal became stuck and caused the car to speed out of control on a California freeway.
James Sikes quickly became the face of the Toyota gas pedal scandal after he called 911 to report losing control of his Prius on Monday. His car reached nerve-rattling speeds of 94 mph before an officer helped bring it to a stop.
Federal investigators are looking into the incident, and Toyota officials said they have talked extensively to Sikes.
A law firm representing Sikes said Thursday he has no plans to sue Toyota over the ordeal. A phone message left for the firm seeking additional comment wasn't immediately returned.
Don Esmond, senior vice president of automotive operations for Toyota Motor Sales, said all Priuses are equipped with a computer system that cuts power to the wheels if the brake and gas pedals are depressed at the same time — something Sikes was doing.
"It's tough for us to say if we're skeptical. I'm mystified in how it could happen with the brake override system," he said.
He attributed the bulk of problematic Toyota acceleration reports to faulty floor mats that trap the gas pedal.
The harrowing story served as yet another embarrassment for Toyota as it fends off intense public backlash over safety issues.
Toyota has recalled some 8.5 million vehicles worldwide — more than 6 million in the United States — because of acceleration problems in multiple models and braking issues in the Prius. Regulators have linked 52 deaths to crashes allegedly caused by accelerator problems.
The dramatic ordeal unfolded Monday as Sikes drove his blue 2008 Prius along a freeway near San Diego.
He called 911 and reported that his gas pedal had become stuck, and spoke to dispatchers in two calls that spanned 23 minutes. The 911 dispatcher repeatedly told Sikes to throw the car into neutral and turn off the ignition. Sikes often didn't respond to her instructions, but he later said he had put down the phone to keep both hands on the wheel.
A California Highway Patrol officer eventually pulled alongside the car and told Sikes over a loudspeaker to push the brake pedal to the floor and apply the emergency brake.
The patrol said the braking coincided with a steep incline on the freeway that helped slow the car to 50 mph — at which point Sikes shut off the engine.
When asked why he didn't simply put the car in neutral, Sikes responded: "You had to be there. I might go into reverse. I didn't know if the car would flip. I had no idea how it would react."
Sikes spoke in calm, measured tones on the emergency call, and later said he was "embarrassed" by the incident.
"I'm just embarrassed about that," he said. "You have to be there. That's all I can say."
Meanwhile, the National Highway Traffic Safety Administration is dispatching experts to a New York City suburb to look over a wrecked Toyota Prius whose driver said it accelerated on its own into a stone wall.
The 2005 Prius was being driven Monday by a 56-year-old woman who told police it sped up on its own as she was easing out of her employer's driveway.
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Krisher contributed from Troy, Mich. Associated Press Writer Greg Risling also contributed to this report from Los Angeles.
WASHINGTON – Americans are recovering their shrunken wealth — gradually. Household net worth rose last quarter, mainly because the healing economy boosted stock portfolios. But the gain was slight. And it was less than in the previous two quarters.
The Federal Reserve said Thursday that net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. It marked the third straight quarter of gains. But economists say consumers would need a stronger and more prolonged increase in their wealth to persuade them to ratchet up spending.
Net worth had risen by a more robust 4.5 percent in the second quarter of 2009 and an even faster 5.5 percent in the third quarter. Net worth is the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards.
Even with the gain, Americans' net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of $65.9 trillion. That illustrates Americans' vast loss of wealth from the worst downturn since the 1930s.
Growth in stock portfolios delivered the biggest lift to net worth in the October-to-December period. The value of stocks rose by nearly 4 percent to $7.7 trillion. Higher home prices helped a bit. The value of real-estate holdings edged up 0.2 percent.
During the recession, which began in December 2007, household net worth had plunged as low as $48.5 trillion in the first quarter of 2009. Stock holdings and home values nose-dived. As their net worth evaporated, Americans felt less inclined to spend.
For all of last year, consumer spending dropped 0.6 percent. This year, as wealth, the economy and financial conditions slowly recover, consumer spending is projected to grow around a modest 2.2 percent, according to the National Association for Business Economics.
By contrast, in 1983, when the economy was recovering from the 1981-82 recession, consumer spending surged 5.7 percent. Unlike past rebounds led by ordinary shoppers, this one so far has been driven more by spending from businesses, foreigners and — until it runs out — government stimulus. Consumers have been spending more lately. But they remain cautious.
"It would take a string of increases of a size that they believe can continue and that they can have faith in for consumers to really boost their spending," said Scott Hoyt, senior director of consumer economics at Moody's .
Each dollar increase in household wealth translates into roughly three to four cents of consumer spending over two years, Hoyt said.
That isn't much.
Just ask Marcia Karon, 55, of Atlanta. She's felt little benefit from the economic rebound or the stock market. Her family's finances are being crimped in other ways. Her husband has taken two pay cuts in the past year, their property taxes remain high and "everything else is going up," she says.
"Things are tight," says Karon, who works at home as a calligrapher and bookkeeper. "Over the last year we've had to go through what little savings we had set aside just to get by."
Not until 2012 does Hoyt think household wealth will return to its pre-recession levels. A severe setback to the economy could delay it further, he added.
Americans reduced their borrowing last year at a record pace. They did so amid rising defaults on mortgages and credit card debt. The drop also reflected concern among households about their diminished net worth.
Household debt — including mortgages, credit cards, auto and student loans — contracted at an annual rate of 1.75 percent in 2009, the Fed report said. It was the first annual decline on records going back to 1945.
Benefiting most in the fourth quarter were those invested in the stock market. The Standard & Poor's 500, a broad barometer of stocks, climbed 5 percent in the quarter. The Dow Jones industrial average gained 7 percent.
But the gains have slowed this year. The two indexes have risen just 2 percent and 1 percent, respectively. Even with the market's rally, the S&P 500 is still 27 percent off its October 2007 peak.
Holders of 401(k) retirement accounts have recovered somewhat from the walloping they took in the meltdown. But even with continued contributions to those accounts, many are still struggling. Average account balances for 401(k) contributors ages 45 and older remained 2 to 3 percent lower at the end of December than at the end of 2007, according to the Employee Benefit Research Institute.
Some have fared better.
Julie Arnheim, 43, of Los Altos Hills, Calif., returned to work a year ago because the economy had beaten down her and her husband's finances. Now, thanks to the stock market's rebound, their net worth has come all the way back from a 30 to 35 percent drop.
"We've lost a year and a half of growth, but it's easy to be upbeat," says Arnheim, an entrepreneur. "There's a lot of retired people I know who were hurt, and they don't have the longevity for the market to come back and keep growing."