King of PCs, Lenovo sets eyes on smartphone market

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In China, Lenovo is better known as the world’s new No. 1 PC maker, a force to be reckoned with in smartphones. In China, Lenovo is better known as the world’s new No. 1 PC maker, a force to be reckoned with in smartphones.
SummaryLenovo, 2nd-largest smartphone brand in China, wants to push into US, other markets in 2014.

In the US, Lenovo is still best known as the Chinese company that bought IBM’s PC business in 2005. In China, it is better known as the world’s new No. 1 PC maker, a force to be reckoned with in smartphones and a bellwether for the nation’s economic and technological might.

The laptop maker is already the second-largest smartphone brand in China, after Samsung. Lenovo, which never had modest plans, wants to build on that success and begin pushing into the US and other wealthy markets in 2014.

“I’ll be very clear: Our aspiration is someday to be No. 1 in the mobile space,” said JD Howard, a Lenovo vice president who is in charge of developing the company’s smartphone business outside China. “I know it sounds crazy, but even five years ago, if I had said we’d be No. 1 in PCs, people would have said we were crazy.”

The company must balance American and Chinese cultures. It has dual headquarters, in Beijing and Morrisville, NC Eighteen nationalities are represented among the top 100 managers. While it has had success worldwide in PCs and with its new smartphones in China, its good fortune in developed markets, dominated by Apple and Samsung, is anything but assured.

But the company constantly surprises. Lenovo was founded in 1984 by Liu Chuanzhi, a computer scientist, and a group of other engineers with financing from the Chinese Academy of Sciences, a government-linked research institute that still holds an indirect stake in Lenovo.

Liu startled the world when it bought IBM’s PC business. The IBM deal gave the upstart instant credibility and cachet because he secured the right to use the ThinkPad name, a popular brand among companies around the world. Lenovo then made other deals that gave it a presence in major markets like Germany, Brazil and Japan.

By September of this year, Lenovo had cemented its position atop the PC industry. It sold more PCs than Hewlett-Packard and Dell, as well as the fading Taiwan-based rivals Acer and Asus. Lenovo had secured a 16.7 per cent share of global PC shipments, according to the two market research firms that track them, Gartner and IDC.

The company’s strength has always been in building very durable laptops, but recently it has expanded into tablets. In January 2012 it introduced a new device under the Yoga brand that blends the features of a laptop and a tablet, including a flippable touch screen.

Moreover, the tablet runs on Android, which has been so important to the success of Samsung’s smartphones and tablets. It showed the kind of flexibility that most PC makers, wedded to Microsoft’s operating system software, lack.

“The PC is not going to go away tomorrow,” Peter Hortensius, president of the company’s Think Business Group, which serves corporate customers. “Two hundred billion dollars is a big pie, and we think we can get a bigger piece of it,” he said, referring to the approximate annual sales in the global PC market.

-ERIC PFANNER

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