Lenovo CEO: ‘We’ve never been so close to the top’

On April 11 in Beijing, Lenovo held its fiscal 2012 pep rally with the title “Wow! Begins Now”. At the ceremony, Lenovo’s president and CEO Yang Yuanqing revealed their objective in the coming fiscal year, “Our goal is to be No.1 in global PC market. It’s the first time we’ve ever been so close to the top.”

April 1 was the first day of Lenovo’s fiscal 2012. According to a April 11 Gartner report, in the first season of 2012, HP’s shipments were 15,305,413 with a 17.2% share.

Meanwhile, Lenovo’s market share was 13.1%, only 4 percentage points from that of HP. Gartner’s report showed that Lenovo experienced the strongest growth among the top five vendors, as its shipments increased 28.1 percent in the first quarter of 2012. Lenovo has been enjoying healthy growth in the professional market, while the company successfully expanded into the consumer space.

However, it is widely known that low profits prevail in the PC market. In its lasted fiscal season, Lenovo only had a profit margin of 1.8%. With the aim to take the biggest share in the market, which means further expansion, will Lenovo have an even lower profit margin in the future?

When asked this question, Chen Xudong, senior vice president of Lenovo Group and president for Lenovo China Region, said, “This pressure will push Lenovo to stretch from the red ocean of PC and sail into the blue ocean of smart TV and smartphone.”

Lenovo calls it “PC+ Strategy”, which covers terminal products like PCs, smart phones, table PCs and smart TVs.

Yang Yuanqing said, “Lenovo’s smartphones have been among the Top 3 in the Chinese market.” In the Lenovo Earnings press release of third season ,2011, Lenovo’s smartphones were a 2-digit market share. The price of Lenovo’s smartphones is 1,000 yuan RMB(US 9) each. In fiscal 2012, Lenovo will release 40 new models of mobile phones and expand its business to overseas markets.

In the field of tablet PCs, Lenovo’s third generation tablet PC has been advanced:  8.7 mm thick, 580 grams and 20 hours of standby time (including peripheral circuits). As the only partner of Microsoft and Intel in the domain of tablet PCs, Lenovo will be the first to release its tablet PCs with Windows 8 system in Oct 2012.

Lenovo’s smart TV ideaTV K91 will be officially released on May 8, which adopts the voice-control technology.

Despite the greater profits and opportunities promised by the blue ocean, Yang Yuanqing stressed that the PC will always be the backbone of Lenovo.

In the PC market, Lenovo’s firmest support still comes from China. With a 35.3 % market share, Lenovo has been on the top among its rivals and set up the goal of 40 % market share this year. Outside China, Lenovo has 2-digit increase in 13 emerging markets with a 14 % market share in India, while in mature markets of America and European countries, Lenovo PC sales are weaker.

On April 2, former Acer CEO Gianfranco Lanci was appointed Lenovo’s senior vice president and head of EMEA(Europe, Middle East and Africa). Lanci said Lenovo will try to be among the top three in these three regions — Europe, Middle East and Africa.

At the ceremony, Yang Yuanqing said, “I personally love the statement of Lenovo made by an American press, that Lenovo is a combination of Apple and Starbucks in the fast developing China. But it’s not enough for us to be just like that. Hopefully next time when this press reports the situation of Lenovo, they will change ‘in China’ into ‘in the world’.”
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