Partners are unnerved by what they say are some pretty deep cuts to their profitability within the Lenovo program via cuts to back-end rebates and on the distributor level. What's the rationale for the changes?
Let me give you some perspective from Lenovo and what we're currently faced with in the market and some of the dynamics that are happening in our route to reach end users today. We're still seeing continuing increased costs in terms of SSDs, in terms of memory, all the components that we need to build a PC. That structure is still being compressed, and that is a factor of our industry. Components from PCs are going to other places. What we're experiencing is supply and demand, and costs are not decreasing, they're increasing. We've held as best we could those costs because we know that our end-user expectation is to get more for less money, and that, frankly, has been the case for years and that really has changed this year. We're to a point where I'm seeing it from all my competition. OS cost increases that are pending and then component cost increases. If you're an end-user in the commercial space buying a PC, it's no surprise that costs are going up.
