Lenovo expects the growing market for 7-inch tablets to compete with large-screen smartphones, not PCs.
"The market accepts the 7-inch [tablet] better than the 10-inch. That's a very strong signal, the tablet will not replace the traditional PC," he said during the conference call.
Yuanqing continued. "Probably, the tablet will compete with the large-screen smartphone rather than the PC," he added.
Popular smartphones, like the 1,280x720 resolution 4.8-inch Samsung Galaxy S3, sport large displays that are approaching five inches in size.
And DisplaySearch said in a research note today that future smartphones will have 5-inch displays with a stunning 1,920×1,080 pixel density.
Yuanqing also commented on touch screens coming to Windows 8 laptops.
"Touch will become a very popular feature on the traditional PC," he said, adding that Lenovo is trying to secure a steady supply of these screens. "We can't guarantee we'll get 100 percent of what we want to get [but] we are definitely trying our best to get enough supply," he said.
That said, Lenovo believes that so-called convertibles -- laptops that can be converted to a tablet -- will become more popular than traditional clamshell laptops with touch screens.
And he cited the company's Yoga convertible as an example of how they're aggressively addressing this new market.