Lenovo ushered in the 35th anniversary : performance rebound, when the brand will recover?

Lenovo recently celebrated its 35th birthday. On November 1st, Lenovo Chairman and CEO Yang Yuanqing sent an internal e-mail to employees entitled “Happy Birthday, 35-year-old Lenovo”, reviewing the key time nodes of Lenovo’s development from its inception to today’s global high-tech company.

In 1984, the Institute of Computing Technology of the Chinese Academy of Sciences invested RMB 200,000 and 11 scientists founded Lenovo

In 1990, Lenovo launched lenovo-branded personal computers

In 1997, Lenovo won the Chinese PC market

In 2004, Lenovo acquired IBM’s PC business

By 2013, Lenovo was the world’s pc market champion

After topning the global PC market, Lenovo began to shake off its stereotype of pc makers in 2014. Lenovo’s transition from a single business to a multi-business business by acquiring IBM System X and Motorola Mobility.

Yang Yuanqing said in the letter:

To this day, Lenovo has grown into a global high-tech company with an annual revenue of more than 350 billion rmb. With 57,000 employees operating in 180 markets around the world, we are not only the world’s number one PC, the world’s number one, and we’ve built a diverse business that includes smart devices, data centers, data intelligence, the business Internet of Things, and Lenovo Ventures.

PC shipments remain number one, business diversification

联想迎来35周年 业绩回暖,品牌何时恢复?

Earlier in October, Gartner, a leading information technology research and analytics firm, released its Third Quarter 2019 Global PC Shipments Report. The report shows that global PC shipments increased slightly in the third quarter of 2019, to talling 68 million units, an increase of 1.1% year-on-year.

Lenovo topped the list with 24.7% of the market, with 16.806 million shipments, up 5.8% year-on-year. Lenovo has been expanding its footprint in order to achieve its current success in the global PC market:

In 2004, Lenovo completed its acquisition of IBM’s PC business to accelerate the pace of globalization

In June 2011, Lenovo expanded its European market by acquiring an 80% stake in Germany’s Medion for $670 million

In July 2011, Lenovo established a PC joint venture with NEC of Japan, accounting for nearly 25% of the Japanese PC market

In September 2012, Lenovo acquired CCE, a Brazilian electronics manufacturer, to enter the Brazilian market

In May 2018, Lenovo completed its acquisition of Fujitsu shares, holding 51% of the shares, further expanding japan’s market share

It is worth mentioning that before the acquisition of Fujitsu shares, Lenovo’s market share reached about 21%, with Fujitsu shares to further increase the holding, from the data released by Gartner, Lenovo’s current global market share has been nearly 1/4 (24.7%)

联想迎来35周年 业绩回暖,品牌何时恢复?

Of course, Lenovo’s transformation has also received widespread attention from the outside world. In October 2014, Lenovo decided to set up a new subsidiary to create an Internet model of smart terminals and services business.

To now, Lenovo’s business has penetrated into education, medical care, transportation, manufacturing, energy and other fields. In Q3, 2019, Lenovo’s consolidated revenue grew 8% year-on-year to $14,035 million, marking the sixth consecutive quarter of year-over-year growth.

It’s worth noting that Lenovo has now partnered with Microsoft on the Internet of Things, showcasing ThinkIoT products powered by Microsoft’s Azure cloud platform, and has entered a new 3S strategy phase, smart IoT, smart infrastructure Infrastructure and Industry Intelligence.

Lenovo easily gets accused

联想迎来35周年 业绩回暖,品牌何时恢复?

Above, Lenovo Chairman and CEO Yang Yuanqing

Although Lenovo has been around for 35 years, it has also been tested in brand name.

In 2008, Lenovo launched the ThinkPad X300 in Beijing, and the low-edition version sold for as much as RMB24,999, to which Mr Yang responded:

Good products should have high prices, if the price is too cheap, users may feel that the product is not good.

As mentioned above, Lenovo’s successful acquisition of IBM’s PC business in 2014 deepened its internationalization process, and in order to break into the international PC market and compete with giants such as HEK Dell, Lenovo adopted a “low price strategy” – in the U.S., the same configuration of computers, Lenovo’s price may be more than 20 percent lower than other brands; Lenovo’s ThinkPad X1 Carbon, released in 2017, is priced at $1,500 (RMB 9,700 a month) and the domestic version is RMB24,999.

Some media quoted Yang Yuanqing’s explanation:

China’s rich people are getting richer, and high pricing is in line with the face of people.

Last year, an article on the Internet that read, “Lenovo didn’t support Huawei on a 5G standard vote”, thrust Lenovo to the forefront. Subsequently, Lenovo founder Liu Chuanzhi, holding Zhu Linan, group chairman Yang Yuanqing, three top leaders jointly sent a letter, calling on all Lenovo employees to act, vowed to win Lenovo’s honor war; In May, Lenovo was caught up in a wave of public opinion over “suspected cuts to Huawei” and “not Chinese companies”.

All in all, as a large enterprise, Lenovo’s slotted points are indeed many. But Lenovo has focused on the “outside world” for years, and now it is beginning to realize the importance of its home market.

Liu Jun, Executive Vice President and President of Lenovo Group in China, said:

In the past, Lenovo has suffered too much negativity, some of it nonsense. We should present you with a true association, not a discredited and completely distorted company. Now is the time for Lenovo to return to its home market. Rebuilding Lenovo’s competitiveness and business model in the local market is the key to future success.

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