Around the world, PC sales are dying. The global recession is causing consumers and businesses to defer purchases until their current machines break down. Their older computers have powerful enough processors and adequate versions of Microsoft (MSFT) Windows to last until kingdom come.
Gartner and other research firms expect PC sales to be down in almost every major region this year. This has driven stocks in companies such as Dell (DELL) and HP (HPQ) to lows. It has caused the large Chinese computer operation Lenovo to restructure to cut costs.
Lenovo has come up with an innovative solution to its sales problem. It will market its product to farmers in the rural sections of the most populous country in the world. According to The Wall Street Journal, “Lenovo Group Ltd., refocusing on the Chinese domestic market, said it will target rural customers with lower-cost computers and 700 new retail stores.”
The price of the computers will be cheap, but with most of its manufacturing in Asia, Lenovo has a low cost of goods.
Can Dell and HP get in on the action? Each does sell a lot of PCs in China. Of course, they would have to go to a lot of trouble to set up stores in remote regions. That may be too costly.
But, China is not the only nation with a lot of farmers. Dell and HP may be better off focusing on the rural markets in the US, Canada, Argentina, and Eastern Europe.
So, the PC business has come to this. Its last frontier of growth is in a corn field.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks