Lenovo may not be considered tech royalty, but it's definitely blue-blooded. The company was already the largest PC maker in the world's most populous country when it acquired IBM's PC operations for approximately $1.75 billion. Six years later, in 2011, it toppled Dell as the world's #2 PC company. Besides desktop and notebook PCs (nearly 95% of sales), its products include smartphones and tablets, workstations, servers, storage drives, and IT services. It also offers IT management software under the ThinkVantage name. Lenovo's main facilities are in Beijing; Singapore; and Morrisville, North Carolina. It has research centers in China, Japan, and the US. Lenovo generates nearly half of its revenues in China.
Lenovo saw 2010 successes turn into 2011 dominance, outperforming the global PC market. The year continued a streak of seven quarters of it being the fastest growing of the world's top five PC companies, climbing from #4 to #2. The battle plan since a 2009 restructuring has been to "protect and attack" -- the protection being of its supremacy in China (30% market share), the attack focused on other emerging markets.
Contributing to its industry-leading gains was a joint venture formed at the beginning of the year with Japan's #1 PC company, NEC, called NEC Lenovo Japan Group, in which Lenovo holds a 51% stake. The two companies are also considering working together internationally, covering not only PCs, but also digital tablets, as well as IT products such as servers.
Its growth in Europe was helped by a majority stake acquisition that year in Germany-based computer and electronics reseller MEDION. (MEDION"s founder and former majority owner Gerd Brachmann retained an 18% interest.) Lenovo followed that up by enlisting a former CEO of major competitor Acer to help with MEDION's integration.
To help support its overall growth, Lenovo created a $300 million manufacturing joint venture with Taiwan-based Compal Electronics later that year. The joint venture, in which Lenovo will command a 51% stake, will operate a facility in Hefei, China scheduled to start production of laptop and desktop PCs by the end of 2012.
Lenovo has been able to parlay its strength in China into success in other emerging markets on the PC front. It recognizes, however, that the PC market is being overtaken by mobile computing, and responded by forming the Mobile Internet and Digital Home (MIDH) Group business unit. In 2011, it launched a tablet, LePad, in China with a view to introducing more tablet products globally in the next fiscal year. Its pre-MIDH, 2010-debuted LePhone runs on Google's Android platform. Mobile sales, which come mostly in China, grew nearly 50% in 2011.
Not long after the CEO change in 2009, Lenovo realigned its corporate structure and product portfolio. Geographically, the company divided its business between Mature Markets and Emerging Markets. Its primary product lines became the Think Product Group and the Idea Product Group. The Think unit is aimed primarily at the enterprise market, while its Idea unit is focused on consumers and small and midsized businesses.
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.