Lenovo guns for smartphone leaders

Last year Lenovo became the world’s number one PC maker. Now it aims to pursue smartphone leadership, writes ARTHUR GOLDSTUCK.

The world’s leading computer manufacturer, Lenovo, plans to move into the number three position in global smartphone sales in the coming year – and then intends to challenge the two leaders for the top spot.

We will stay number one in PC, but we won’t be satisfied with that,” Lenovo chairman and CEO Yuanqing Yang said at a media briefing in Wuhan, China.

Speaking shortly after Lenovo announced record turnover of $38,7-billion and pre-tax earnings of $1,01-billion for the year ended 31 March, he said the company was “very confident” of keeping its leadership in the traditional PC area. However, The tablet market, dominated by Apple and Samsung, was more than just a tempting target.

We are also ambitious to become number one in the broader computer market of PCs and tablets. If you combine tablets with traditional PCs, it is still a growing industry. We are very confident we will become the leader in that area. That is our next ambition, to be number one in two years.

The recently-announced acquisition of Motorola from Google, he said, would allow Lenovo to sell 100-million smartphones and tablets in the next year, giving it a clear number three position in global sales in that sector too, behind Samsung and Apple. Some have criticised the acquisition, but he pointed to the turnaround already reported for the Motorola Mobility division by Google. Arthur Goldstuck meets Lenovo CEO Yuanqing Yang

It delivered strong growth with a better product portfolio, and profit above the target they gave us when we negotiated the deal. That gives us more confidence we can run it as a business. If we were not confident of this, we would not buy the business. It is a basic requirement. We can realise a lot of synergy in material costs and operational costs.

We think it can also help us build a strategic partnership. That is important for both companies. For Google, Lenovo is one of their most important partners worldwide, but particularly in China. We are second largest smartphone company in China and the largest in tablets, so we can help them expand their ecosystem in China.

Yang pointed out that, with only two dominant players in the smartphone industry, customers are eager to have a number three to give them more choice.

We will be that choice. But we will not be satisfied with being just number three. Over time we will challenge for number two, but that is in the long term.

Being number one gives you more opportunity to make more money. You have a better opportunity to serve more customers. It’s a volume game. If you don’t have scale and volume, it’s not easy to compete. So we are not satisfied with number two either. Our culture is a winning culture.

In its annual results, Lenovo revealed that the Europe, Middle East and Africa region had overtaken China in PC sales for the first time, with most of that contribution coming from Europe.

Yang said that he hoped that, some day, Africa would be a bigger market than Europe.

Africa has more population than Europe or Middle East, so I hope some day Africa will be a bigger market than Europe. Its probably not going to happen in the next three years, but after that it’s anybody’s guess, especially because there is very rapid pick-up and adoption of smartphones across Africa.