About Lenovo (united States) Inc.
Lenovo Group tops the worldwide PC market, ahead of HP Inc. and Dell Technologies, 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.
Lenovo's Intelligent Devices segment includes the company biggest business, the PC and Smart Devices unit, which accounts for about 75% of the company's revenue. It sells PCs, tablets, augmented and virtual reality, smart devices, software and services. Intelligent's Devices also includes the Mobile business, which accounts for about 15% of revenue by selling mobile phones.
The Data Center Business Group, about 10% of revenue, offers servers, storage, networking, software, and services.
The company makes many of its own products, but outsources some manufacturing.
Hong Kong-based Lenovo serves customers in more than 160 countries. Its three biggest markets are the Americas, more than 30% of revenue, with Europe and China, each accounting for about 25% of revenue. The Asia/Pacific region (not counting China) generates the remaining revenue.
Lenovo has operational hubs in Beijing and North Carolina and manufacturing facilities in China, Mexico, India, Japan, Brazil, Germany, Hungary, and the US.
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 and rose again in 2019, reaching a company record.
In 2019 (ended March), revenue jumped about 13% to $51 billion as the PC and Smart Device business and Data Center Group returned record sales. Lenovo regained its status at the top PC maker during the year and hyperscale, software-defined infrastructure, and high performance computing produced higher Data Center Group revenue. Mobile sales were lower year-over-year.
Profit jumped to $650 million in 2019, reversing a loss of $135 million in the previous year, when the company had a one-time non-cash write-off of $400 million due to the US Tax Cuts and Jobs Act.
Lenovo had $2.6 billion in cash and equivalents in 2019 compared to $1.8 billion in the year before. In 2019, operations generated $1.4 billion, investing activities used $699 million, and financing activities provided $122.7 million.
Lenovo built a $51 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 regained its spot at the top PC maker in the world in 2019, but its mobile phone business has been slowed by the highly competitive market. The company reduced the mobile unit's cost by a third in 2019, resetting its financial stakes. While the mobile business had lower revenue in 2019 from 2018, sales picked up in the 2019 fourth quarter. The fierce competition from other China-based manufacturers targeting the lower end of the mobile market continues to threaten Lenovo’s mobile business.
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. Lenovo engaged in a partnership with NetApp that allows Lenovo address most parts of the storage market.
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.
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