Lenovo’s Goal of Tech World DominationReading Time: 4 minutes
You may not know it yet but Lenovo has grand ambitions to become one of the most powerful tech companies on the planet. Their original move to buy IBM’s PC business set this goal in motion and has become the cornerstone of their tech reach into enterprise and consumer computing markets world wide. With that move they have achieved one of the most difficult tasks in business by successfully integrating two very different companies and cultures under a new set of owners and done it quite well. Within weeks of Lenovo buying IBM’s PC business I was privileged to be invited to Beijing to meet with Lenovo’s top management and get their ideas about merging these two companies and try and understand their long term goals.
Personally I was highly skeptical about this marriage as I was very close to the IBM PC group from its birth. In fact, my first major project for Creative Strategies in 1982 was to work with IBM’s new PC division on market research projects and channel development. One of my most interesting projects was to actually review the strategy and designs of their original laptop that debuted in 1986 and have continued to follow their developments in laptops ever since. During that time I watched IBM become a powerhouse in PCs and perhaps more importantly, develop a world class sales and service team and become one of the most trusted computing brands in the enterprise. This is where I had most of my doubts about the merger. How could a Chinese company gain the trust of IBM’s IT customers and be assured that Lenovo would continue to advance products and provide great service and support. While in Beijing I was assured that Lenovo would be careful with this issue and work hard to keep IBM’s PC customers happy.
To the credit of Lenovo’s Sr. management they took a hands off approach with IBM’s PC division and let them do what they did best. They were slow to integrate Lenovo’s own corporate strategy into this US business and let the former IBM PC management team run things from their Raleigh, NC headquarters. While their were some big Justice Department hurdles to get through initially, once the US governing agencies cleared the deal, the merger of IBM’s PC group and Lenovo was in full swing. Since the purchase of IBM’s PC division in 2005, Lenovo has leveraged both their own business agenda with the skill set and operational excellence that they got with the IBM PC group and have become one of the most important tech companies in the world.
When they recently became the #1 PC vendor in the world Lenovo really got the attention of the business and consumer public and are now considered a powerful brand in computing throughout the world. The market also took note when they got into the smartphone market in China and went from zero market share to being the third major handset vendor in about 18 months. This is a company on a mission and it seems to me that they have grand ideas of becoming one of the most dominate tech companies in the world. After watching the progress over the last 9 years I have a sense that they may eventually achieve this goal.
The reason I feel this way is the based on a couple of observations over this time period of following them closely.
The first is thing is the management team in place both in China and the US. This is one of the best group of PC executives I have dealt with and they all are highly committed to the overall Lenovo vision. They also have one of the smartest marketing minds in David Roman in any tech company. David is their CMO and came to them from HP where he was integral to HP’s “The PC IS Personal” campaign. Over the years I have met many of their executives from China and North Carolina and am pretty confident with their ability to execute this grand vision.
Second is their robust R&D and Design groups. While Dell, HP, Acer, Asus and Samsung have solid R&D divisions my personal exposure to Lenovo’s design and R & D teams have me convinced they have the best group of this nature among these companies. Also they have a very large budget for these divisions and I continue to be impressed with the way they create and innovative with their PC’s of all shapes and sizes these days. This is a real competitive advantage for them and only Apple has a team in this area that I consider better than the Lenovo teams.
Third thing that impresses me is that they have a very clear vision of what they want to do and how they will get there. Adding IBM’s Server group to their portfolio expands their business opportunities significantly and the Motorola purchase gives them a foot hold in the US cell phone market. Late last year I was talking to some Lenovo execs out of Raleigh and they confirmed that Lenovo wanted to bring their smartphones to the US. When I heard that I silently whispered to myself “good luck.” But by using Motorola as their US arm and more importantly leveraging Motorola’s R&D and carrier relationships, I no longer doubt that Lenovo could become a powerful force in smartphones even in the US. This was a win-win for Motorola and Lenovo even if Google had to take a huge loss on the deal.
In an interview with Fortune, Lenovo CEO Yuanqing Yang says that his company seeks to replicate its ThinkPad success with Motorola. The Fortune reporter asked “ With Motorola, Lenovo will be the No. 3 smartphone maker worldwide. Do you think your company can catch up with Apple or Samsung, who are still far ahead of you? And how long will it take?”
Yuanquin Yang replied “Definitely, over time. Our mission is to surpass them.”
Achieving that goal will not be an easy task given Samsung and Apple’s powerful position in the market today. Yet, given their track record and the goal to become the top tech company in the world, I have to give YY as he is called by the Lenovo team, the benefit of the doubt. Lenovo is on a mission and they have achieved much in 9 short years. With a few other acquisitions and a committed team of executives it seems to me that at the very least Lenovo is on a path to becoming a power house in smartphones and tablets along with having continued success with PC’s and it will be interesting to see how much more they can accomplish over the next decade.