Updated: 2013-02-01 13:24
By Zhang Yuwei (China Daily)
Above: Lenovo Group Chairman and CEO Yang Yuanqing has led the PC maker to growth in profits and market share as it develops new products. Below left: The company's offices near Raleigh, North Carolina. Below right: The Beijing guard shack where Lenovo was founded in 1984. Nacho Doce / Reuters
Zhang Yuwei / China Daily
Provoded to China Daily
Lenovo has relied on innovation and careful brand management to become a world leader in PC production while expanding into tablets, smartphones and new markets, China Daily's Zhang Yuwei reports from North Carolina.
On an office wall in North Carolina's tech-focused Research Triangle, the success story of Lenovo Group Ltd is told in a photo timeline bedecked with milestones, starting with the founding, in a concrete-block Beijing guard shack, of what has become the world's No 2 maker of personal computers.
Started in 1984 by a group of Chinese engineers with about $25,000, Lenovo might seem an unlikely power in the global PC business, where long-established Western brands dominate. It's the top seller in Japan, Germany and three other of the seven biggest PC markets.
A slogan conveys the company's roll-up-your-sleeves ethos: "Lenovo: For those who do".
It ranks 370th on Fortune magazine's latest list of the biggest companies in the world, and had $30 billion in sales last year, a presence in about 60 countries and a worldwide work force of 29,000 including more than 2,000 in North Carolina. The Lenovo complex in Morrisville, near Raleigh-Durham, serves North American customers and is a co-headquarters with the corporate campus in Beijing.
David Roman, chief marketing officer, calls Lenovo "a global company with Chinese roots". It has shown that it can catch up to well-known global brands, he said.
"Keeping up with the pace" is the biggest challenge, Roman said. "Right now as a company, we've actually grown faster than our brand."
With 9 percent of the North American market for PCs, Lenovo lacks the level of consumer awareness that it enjoys in China, where its market share is almost 37 percent.
Liu Chuanzhi, who led the group of Lenovo founders, said that as an industry newcomer his company took inspiration from Silicon Valley heavyweight Hewlett-Packard Co.
Liu, who was the company chairman until November 2011, once referred to H-P as the "earliest and best teacher" for Lenovo. For more than 10 years, it distributed the California firm's products in China.
In last year's July-September quarter, Lenovo passed H-P in shipments to become the No 1 PC maker for the first time, according to tech industry research firm Gartner Inc. Lenovo expanded its PC market share to 15.7 percent, just ahead of H-P's 15.5 percent.
H-P regained the top spot in the following quarter, but Lenovo is close behind.
This week, the Hong Kong-listed company reported net income of nearly $205 million from its fiscal third quarter, which ended Dec 31. That was 34 percent higher from the profit in the same period a year earlier and was propelled by strong PC sales in a market that is otherwise shrinking due to consumers' shift to smartphones, tablets and other devices.
Shipments of Lenovo PCs rose 8.2 percent from the fiscal third quarter of 2011, while those of H-P and US-based Dell Inc fell 0.6 percent and 20.8 percent, respectively.
Lenovo's quarterly revenue was up almost 12 percent, to $9.4 billion. China accounted for 43 percent ($4.1 billion) of sales while 14 percent came from North America ($1.3 billion). That represented revenue increases in the two markets of 17 percent and 8 percent, respectively, from a year earlier.
The company shipped 9.4 million phones, including 9 million smartphones, from October through December - more than double the number from the same period of 2011. In China, where it is the second-biggest seller of smartphones, the company posted its first quarterly profit in that business.
Lenovo has pushed into other smartphone markets including India, Indonesia, the Philippines, Russia and Vietnam. In its latest earnings report the company said initial market response there has been "encouraging".
"Lenovo has not only achieved record revenue, profit and global PC market share last quarter, but also our smartphone and tablet businesses have delivered hyper growth. Even more, our worldwide tablet and China smartphone businesses have become profitable," Chairman and CEO Yang Yuanqing said in a statement accompanying the earnings report.
Lenovo, he added, has "laid a solid foundation" for a "PC-plus" marketplace.
The company has restructured its divisions "to elevate our diversified business and drive it to the next level", Yang said. "We are confident we can win through differentiation and will be the innovation leader in the PC-plus era."