Lenovo's challenge: i can, too

Updated: 2011-06-17 11:56

By He Wei and Li Luxiang (China Daily European Weekly)

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 Lenovo's challenge: i can, too

Lenovo launched its tablet PC LePad in March and aims to take a 20 percent share of the domestic tablet market by 2012. An Xin / for China Daily

Computer maker takes on iconic brand apple with range of stylish, popular products

Two years ago, Liu Chuanzhi returned to Lenovo, China's largest personal computer manufacturer by market share, as board chairman to sort out a legacy of losses and confused management.

Having revamped the company, he now feels confident enough to throw down the gauntlet to Apple Inc.

By vowing to give Steve Jobs' company a run for his money earlier this year, Liu shocked the IT world. But analysts of the industry are heavily divided on this ambitious attempt.

Liu came to the rescue of Lenovo at its worst time - after the outbreak of the US financial crisis had thrown the global personal computer market into turmoil. That year, 2009, Lenovo posted a loss of $97 million (68 million euros). With sales plummeting 78 percent because of sluggish corporate demand, a major overseas business focus, Lenovo's global share slipped 7 percent, which further widened the gap with HP, Dell and Acer, the top three global PC vendors.

 Lenovo's challenge: i can, too

Liu Chuanzhi, after returning to Lenovo as the chairman in 2009,refocused the company’s core business to the domestic market. Jerome Favre / Bloomberg

Taking the helm again, Liu steered Lenovo away from its reliance on overseas markets that remained crippled by the economic downturn. Instead, he refocused Lenovo's core business on China and other emerging economies, which were the only bright spots in the global economic gloom.

He also refocused the company on the growing consumer market, an arena previously strategically eclipsed by the business customer market.

Thanks to the strategic shift, Lenovo has just witnessed its best year. According to the company's fiscal year 2010 report, Lenovo's global market share reached a record 10.2 percent, closing the ground on third place Acer's 11 percent. The company's year-on-year growth in sales exceeded that of all the four major vendors.

The upward momentum has continued. Lenovo's fourth quarter report for the period ending March 31, 2011, showed a net profit of $42.13 million, up from $12.8 million a year earlier. China remained the star performer, accounting for 46.4 percent of the company's sales. Moreover, sales in emerging markets such as Russia, India, East Europe and Latin America also increased sharply.

Determined to fend off competitors in the domestic market, Lenovo has been beefing up its expansion in small cities and rural areas. It has strengthened its distribution network in the countryside. The company has made it a commitment to ensuring that a potential buyer can find an outlet selling Lenovo computers within 50 kilometers of where he or she lives.

After putting his own house in order, Liu is casting his gaze on bigger things. In the PC business, nothing can seem more ambitious than taking on the undisputed leader in verve and style: Apple Inc, which has the biggest market capitalization among all competitors. To that end, Liu is leading his company into the realm of design excellence and popular appeal.

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