China’s Lenovo is planning to invest billions of dollars over the next five years on research and development for new technology, including products and services related to the fast-growing metaverse space.
R&D staff at the world’s largest personal computer company will work on “technology which will help businesses capitalize on the metaverse,” Lenovo said in a statement last week. The company says the investment should help “businesses of all sizes capitalize on new and emerging technologies like the metaverse.”
The Beijing-based company will spend about $15.7 billion on new tech-related R&D over the next five years, reported Nikkei Asia. Lenovo said in its statement that it will double R&D investment and add 12,000 professionals over the coming three years for cloud-related research. Cloud technology is a potential element of metaverse development.
The metaverse refers to a nascent but exploding virtual world where people work and play through avatars. The metaverse market was worth about $45 billion in 2020 and could grow to $596 billion by 2027, forecasts Brandessence Market Research. The consultancy points to the booms in mixed reality and online education fueling the metaverse’s growth.
Lenovo has done little with the metaverse to date, notes Brady Wang, Taipei-based associate director with market research firm Counterpoint Research. The company could play on existing strengths to develop servers and cloud-related technology for the metaverse, he says.
Other metaverse elements, such as networking and cryptocurrency, may take off faster if Lenovo invests directly in outside firms rather than doing its own R&D, says Wang. “Every company is different in its approach and it’s not easy to totally depend on oneself,” he adds. “We won’t think connectivity is too good because Lenovo is not a connectivity company, so they’d need to invest in it. For virtual reality, it’s the same thing.”
Lenovo did not respond to a request for comment about the company’s ambitions for the metaverse.
Perfecting individual components of the metaverse instead of pursuing an end-to-end virtual platform will probably make a “bigger impact” for the likes of Lenovo, says Sean Su, an independent tech sector analyst in Taiwan.
Su says the use of virtual reality to interpret data would particularly stand out. Otherwise, he says, Lenovo’s strategy would be “exactly the same as everyone else, a shotgun and a prayer that they’ll hit upon something great.”
Lenovo’s global PC sales that took off around 2012 still top market share charts. It was the world’s biggest PC vendor in the first quarter with a 22.7% market share, according to IDC data. Lenovo chairman and CEO Yang Yuanqing was a billionaire until 2016.