Workhorse Lenovo is the second-largest PC vendor in the world today behind #1 HP and ahead of #3 Dell. Although Lenovo is a global supplier of Think-branded commercial PCs and Idea-branded consumer PCs, it holds a dominant position in China. The company makes tablets, smartphones, laptops, desktops, workstations, servers, software, and accessories, and it is developing and launching mini ultrabooks and ideapads. Lenovo offers services for enterprise, small business, and home office markets. Certain products and services are geared specifically at the growing education, government, and health care verticals. Lenovo formed out of the acquisition of IBM's Personal Computing division in 2005.
Lenovo serves customers in more than 160 countries. The company generates nearly half of its revenues in China, where it holds more than 30% market share in PCs. Lenovo is also increasing sales in other emerging markets.
Lenovo has operations in more than 60 countries across the globe. It has headquarters in the tech hubs of Beijing and North Carolina and manufacturing sites in the US, Mexico, Brazil, China, and India. With a substantial portion of revenues coming from China, it's no surprise that it also maintains major research centers in Beijing, Shanghai, and Shenzhen, as well as in Japan and the US.
In 2012 Lenovo created the Enterprise Product Group to focus on expanding its server, storage, networking, and cloud product offerings for large companies, small and midsized businesses, and systems integrators.
Between 2011 and 2012 Lenovo jumped from being the world's fourth-largest PC vendor to the second-largest. In 2012 and 2011 it outgrew the worldwide PC market in unit shipments and gained market share in all geographies, products, and customer segments. Today, it is the #1 PC company in China and in Japan. It is also the top PC company in the world for large enterprises and the public sector. Lenovo used a different growth strategy than most of its big competitors to reach this market spot, expanding East to West. New products are introduced in China, then spread across the globe.
Although it has long been the leader in China, Lenovo does not rest on its laurels when it comes to increasing additional share in the Asia/Pacific region. To maintain supremacy in this market, Lenovo's Hefei, China-based joint venture with Compal Electronics began mass producing notebooks in 2013. Lenovo, which holds a 51% stake, and Compal, which owns the remaining 49%, will invest a total of $300 million in the JV's expansion.
In Japan, Lenovo leverages the strength of that country's #1 PC company, NEC, through a joint venture called NEC Lenovo Japan Group. That JV, of which Lenovo holds a majority stake, is the dominant PC maker in Japan, with about a 25% share of the market. Prior to the JV's formation in 2011, NEC had been the market leader in Japan but was not turning a profit when it made the deal. The JV helps give NEC access to cheaper Chinese supplies and manufacturing.
Mergers and Acquisitions
In the last two years Lenovo has made acquisitions that are beefing up its cloud offerings and supporting expansion in select markets. In September 2012 the company acquired US-based Stoneware to expand its secure cloud computing portfolio. The deal add new technologies and added capabilities for both commercial and consumer cloud offerings, particularly the ability to provide secure content across multiple devices in education and government. Also in September of that year Lenovo made strides in Latin America by acquiring Brazil's CCE, a regional leader in PCs and consumer electronics. It added manufacturing facilities; an extensive selection of consumer products such as PCs, tablets, smartphones, and televisions; and a robust supply chain.
Across the Atlantic, Lenovo's growth in Europe was supported by a majority stake acquisition in mid-2011 of Germany-based computer and electronics reseller MEDION. The MEDION buy doubles Lenovo's market share in Germany and makes it the third-largest PC company in Europe's largest PC market.
Sales and Marketing
Aiming to boost sales growth, Lenovo in 2013 began producing PCs in North Carolina at a new assembly plant. As part of this effort, the company is devoting more investment dollars to domestic manufacturing.
Legend Holdings, which is controlled by the Chinese government, owns more than 40% of Lenovo. IBM, which has over the years decreased its ownership from 19% to about 4%, finally sold its remaining stake for around $265 million in 2011.