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About LENOVO GROUP LIMITED

Lenovo Group tops the worldwide PC market, ahead of #2 HP and #3 Dell, and it operates competitive phone and server businesses. Through a series of acquisitions, the Hong Kong-based company has assembled a device-driven product lineup that competes in various technology markets around the world. Lenovo has resurrected the Motorola brand in smartphones and unleashed IBM's former low-end server entity into a fast-growing business. Besides ThinkPad-branded commercial PCs, Lenovo turns out tablets, ultrabooks, software, and accessories. Its sales are evenly sourced from the major world markets of China, North America, and Europe.

Operations

Lenovo's PC and Smart Devices Group racks up about 70% of the company's sales, followed by the Mobile Group, which supplies about 15% of revenue, and the Data Center Group with about 10%.

The company makes many of its own products, but outsources some manufacturing as well.

Geographic Reach

Hong Kong-based Lenovo serves customers in more than 160 countries. Its three biggest markets are the Americas, more than 30%, Europe, about 30%, and China, 25%. The Asia/Pacific region (not counting China) generates the rest.

Lenovo has operations in some 160 countries across the globe. It has operational hubs in Beijing, Paris, and North Carolina, and a marketing hub in Bangalore, India. It also has major research centers in Yokohama, Japan, and in China in Beijing, Shanghai, and Shenzhen. It makes products at plants in China, Singapore, India, Japan, Brazil, Switzerland, and the US.

Financial Performance

After building up to a high of about $46.3 billion in 2015, Lenovo’s revenue dipped in the following two years.

Sales rebounded in 2018 (ended May), rising 5% to $45.3 billion from 2017, mostly on the shoulders of an 8% increase in sales in the PC and Smart Devices Business Group. The Data Center Group and the Others segment also grew year-to-year, while the Mobile Business Group’s sales fell 6%.

Lenovo posted a $153 million net loss in 2018 compared to a $530 million profit in 2017. The company paid more taxes in 2018 due to the US Tax Cuts and Jobs Act than it paid the previous year.

The company’s cash balance fell $906.6 million to $1.8 billion in 2018 from 2017. Operations used about $753 million in 2018, investing activities used $1.1 billion, and financing activities provided $874.3 million.

Strategy

Lenovo built a $45 billion revenue company from parts that other companies didn't want. It bought its world-leading PC business from IBM in 2005 and added IBM's x86 server business in 2014. Lenovo added mobile phones in 2014 when it bought the Motorola Mobility phone business from Google.

Lenovo remains the top PC maker in the world, but its phone business has been slowed by the highly competitive market; it lost sales in 2018 from 2017. The company is trying to carve out a spot as a major low-cost phone supplier. Lenovo has had success in South America, where the company’s offering are No. 2 in Brazil. The fierce competition from other China-based manufacturers targeting the lower end of the mobile market continues to threaten Lenovo’s mobile business.

In 2018, Lenovo combined the PC and mobile businesses into the Intelligent Device Group to make better use of shared supply chains and service, as well as accelerate the integration of computing and communications technologies.

In the data center business, Lenovo has built steam with a revamped sales force dedicated to the category and provided technologies for artificial intelligence, big data analytics, and the Internet of Things.

Company Background

Liu Chuanzhi, an engineer at the Chinese Academy of Sciences who wrote industry research reports, established Legend Group Holdings Co. in 1984 in Beijing. Backed by a modest investment from the academy, Liu, who went on to become something of an entrepreneurial hero in China, and 10 other engineers were given a green light to form a retail business. They first bought and sold items ranging from TVs to roller skates, but later focused on distributing computer products and eventually moved into manufacturing PCs for AST Research. Legend introduced its first proprietary product, a Chinese character system for PCs, in 1985.

In 1988 the company formed Legend Holdings Limited, which was originally a Hong Kong-based PC distributor. The following year the parent company began designing and manufacturing motherboards and added systems integration services to its offerings. In 1990 China reduced import tariffs, a move that opened the trade door for companies such as IBM and Compaq. That year Legend Group Holdings began making its own brand of PCs.

In the 2000s, Lenovo bought computer and mobile phone operations from US companies and became the top PC maker.

LENOVO GROUP LIMITED

23/F TAIKOO PLACE LINCOLN HSE
979 KING'S RD
QUARRY BAY, HK
Phone: 852 2590 0228

Stats

Employer Type: Publicly Owned
President and COO and President, PC and Smart Devices: Gianfranco Lanci
EVP and CFO: Wong Wai Ming
Chairman and CEO: Yang Yuanqing

Major Office Locations

QUARRY BAY, HK

Other Locations

Burlingame, CA
San Diego, CA
San Jose, CA
Sunnyvale, CA
Lawrenceville, GA
Chicago, IL
Fort Wayne, IN
Lowell, MA
Marlborough, MA
Morrisville, NC
Horsham, PA
Plymouth Meeting, PA
Pasadena, TX
Orem, UT
Beijing, China
Changchun, China
Chengdu, China
Chongqing, China
Dazhou, China
Guangan, China
Hangzhou, China
Huzhou, China
Jinan, China
Nanchong, China
Qingdao, China
Shanghai, China
Suining, China
Taiyuan, China
Yuxi, China
Zhangqiu, China
Markham, Canada
Montréal, Canada
Taipei City, Taiwan
Machelen (Bt.), Belgium
Hesperange, Luxembourg