Lenovo outperforms market
Updated: 2013-08-16 11:58
By Zhang Yuwei in New York (China Daily)
Gerry Smith says the North American business is a cornerstone for Lenovo Group, the world's largest PC maker. Hu Haidan / China Daily
Lenovo - the world's No 1 personal computer maker - showed a strong performance in its first fiscal quarter results, including sales of mobile devices exceeding PCs for the first time in three months.
The strong results met the company's expectation, said Gerry Smith, president of the Americas for Lenovo, adding that the company aims to improve its rankings in the smart-connected devices market in the future.
"Our goal is to become the No 1 smart-connected devices company in the world," said Smith as he showcased one of the company's flagship super-slender Intel-powered smartphones.
"I am very optimistic and bullish looking forward that we will continue to outperform the market," Smith added.
Lenovo overtook Hewlett-Packard and became the world's No 3 smart connected device vendor last year, thanks to a rapidly growing smartphone market share, according to information technology research firm International Data Corp.
The current No 3 - with a 7.2 percent market share - is after Samsung and Apple in the global smart connected device market, which refers to smartphones, tablet computers, laptops and desktop computers.
The most recent financial results recorded quarterly revenue of $8.8 billion, a 10 percent increase year-over-year, and highest-ever quarterly market share of 16.7 percent. Lenovo's PC shipments for the first fiscal quarter were 12.6 million units, outperforming the industry as a whole for the 17th quarter in a row.
"It shows the power of Lenovo's 'Protect and Attack' strategy and now we are a PC Plus - a devices company not just a PC company," noted Smith.
The two-pronged approach, which has been in place for more than four years, aims to shield the two huge profit centers - commercial PC sales and the China market - while Lenovo moves into new markets with new products.
Yang Yuanqing, chairman and CEO of Lenovo, said the results were fueled by balanced growth through the company's consistent execution of the "right strategy".
"While driving profitable growth in our core PC business, we are rapidly transforming our company into a PC Plus company," said Yang in a statement. "The PC Plus market requires fast, efficient innovation as it moves quickly from premium products to mainstream ones and from mature market domination to emerging market hyper growth."
Smith said Lenovo - which is co-headquartered in Beijing and North Carolina - focuses on innovation, and execution with the support of a diversified global team of seven different nationalities out of the company's top ten senior executives.
"The global diversity [the team] provides us gives an advantage as well," he said.
Yang is called "YY" by his international colleagues, who describe him as someone who has a global vision and is always available to talk about new ideas.
"YY is very strategic, but he also challenges us and pushes us very hard," said Smith.
The North American operation Smith leads is - what he calls - a "cornerstone" of the company's global operation.
"Forty percent of our servers and 60 percent of work stations are sold in North America, so it's a cornerstone of our business," he said.
Americas revenue of $1.9 billion year-over-year for the first fiscal quarter - an increase of 29 percent - comprised 22 percent of the company's worldwide revenue, said Smith.
Last year, the company announced it would add a PC production line in its Whitsett facility near the company co-headquarters in Raleigh, North Carolina.
"We think it is important for North American customers to get their products faster and they have more flexibility and we are going to continue to grow that facility," said Smith, adding that they will add more manufacturing lines which will result in adding more local jobs to the current 115.
But Smith, who also leads the Latin America business, said "all of our geographies are doing well", including emerging and mature markets.
Besides, he said, the company heavily invests in innovation. Apart from the company's expanding facility in North Carolina, it has facilities in Mexico and Brazil and a partnership with a local company in Argentina.
"We have a full range of phones, tablets, PCs and servers, so we offer the customers a variety of choices," said Smith.
Lenovo, the company that started in a concrete-block Beijing guard shack, made headlines when it purchased IBM's PC division in 2005. Like many global brands, it has done a number of mergers and acquisitions in the past years to gain market share and increase its brand visibility.
Early this year as the company closed a deal to acquire Brazilian consumer electronics maker CCE, a deal that more than doubled Lenovo's PC market share in one of the most promising emerging markets.
"From a strategy perspective, it works, and there are a lot of opportunities out there and we believe the markets in both PCs and phones will consolidate," said Smith.
While Lenovo emphasizes its strategy to expand into the PC Plus area, speculation has been sparked over its interest in buying BlackBerry.
Smith declined to comment on the rumors but admitted the company recognizes the opportunities different markets offer.
"We will evaluate all the opportunities and we will look for the right, strategic fit," said Smith, adding the company will look at all markets - emerging and mature - for potential M&A opportunities.
"We've demonstrated that we are not only a PC company, but a PC Plus company," said Smith.
The company's commitment to the smart-connected market is serious with some "game changers" in the works. "We've got some exciting new phones and tablets we are going to launch in the near future," said Smith, adding that some of them would be launched before the "holiday season".
"We will continue to offer premium products, but also other products from the top to the bottom across the customer base," Smith said.
(China Daily USA 08/16/2013 page10)