Lenovo geared up for the long haul in IT sector
Past expansion gives IT giant an edge in foreign markets, says its chief
Yang Yuanqing, chairman and chief executive of the world’s largest personal computer maker Lenovo Group Ltd, is often referred to as “YY” by his business partners. The sobriquet has stood Yang in good stead as it helped his industry peers to interact with him without being tied up on how to pronounce his name.
The Beijing-based Lenovo is also the fourth-largest smartphone vendor in the world after acquiring Motorola Mobility from Google Inc for $2.9 billion more than a year ago. The company is also the top player in the Chinese server market and is expanding into cloud computing in a big way along with plans to be a software and services provider.
All of these achievements were spearheaded by Yang, an engineer-turned-CEO who took the mantle at the firm from its legendary founder Liu Chuanzhi and made it one of the most recognized Chinese brands in the world.
The 51-year-old Yang has spent most of his working life in Lenovo. He joined the company in 1989 when it was just a local PC maker vying for market share alongside Dell Inc, IBM Corp and Hewlett-Packard Co.
Lenovo started to build its international presence after he became the corporate chairman in 2004. That year was also significant for the company as it acquired IBM’s PC unit making the popular ThinkPads.
Yang, who has spent more than two decades with Lenovo, shared with China Daily his ideas on how the company will face up to the new challenges in the mobile Internet era. Following are edited excerpts of the interview. Recently, Lenovo showed off some products such as smartwatches and virtual reality goggles. But Lenovo did not have the tradition of disclosing its projects under development. What has prompted the change?
Lenovo has been paying huge attention to technology innovation ever since I became the CEO. Even when I was not the chief executive, I was responsible for research and development. Many people may think Lenovo achieved its success through efficiency and execution.
But constant investment in R&D and product innovation have been another crucial factor in Lenovo’s success. Back in the PC era, we added a feature that made tablet access to the Internet just a click away. Our products are unique in design and address particular requirements. In fact, it is innovation that helped Lenovo score over competition. Lenovo is building a cloud computing unit. Why do you think it is necessary?
Most of the Internet applications are running on the cloud nowadays. Customers can enjoy the conveniences brought by the Internet because of strong data processing capability from the cloud computing platform.
Lenovo made cloud one of the four pillars of its future business because it helps solve the problem of how the company can serve its customers. Lenovo’s cloud business now has 400 million monthly active users and 100 million units of devices are connected to the platform every month. By using big data, we can learn how users interact with their devices and then use the findings to design the next-generation products.
In addition, we have developed all-around technologies that ensure information security. In the enterprise business, we have launched cloudbased storage and solutions services targeting customers around the globe. We have 150,000 enterprise users now. In 2014, this business doubled its size and we successfully retained 90 percent of our customers. With the global PC market turning flat and the Chinese smartphone market waning, Lenovo is arguably facing the biggest challenge since its establishment. What are your views on this?
We are certainly facing strong challenges this year. Lenovo experienced difficulties in 2008 because of declines in the enterprise sector. But the PC business remained healthy then.
The global PC business has showed no sign of a recovery. The integration of the Motorola unit is underway. So we have to find ways to grow new businesses.
We made a correct decision to move our focus from China to overseas markets. Lenovobranded smartphones are growing rapidly in the Middle East and Africa. Motorola devices are also seeing strong sales in North America and Latin America. We are now a complete global player. The competition in the global smartphone market is not that intense like in China. Most Chinese companies do not have enough brands, channels and patents to fight in overseas markets. But years of overseas expansion have given Lenovo an edge in markets outside of China.
We will continue with our dual-brand strategy of exploring overseas markets with Lenovo and Motorola devices. Are there any areas that you expect to see a quick expansion in the coming years?
Opportunities are everywhere. Chinese companies should build their competitiveness and speed up reform. Lenovo will focus on a few core business units such as PCs, mobility, cloud and enterprise products.
In the mobile segment, first, we are expanding to the emerging markets outside China. Second, we will enter the developed markets with newly released devices. Third, we are focusing on expanding our market channels and cooperating with telecom carriers to regain our leadership in the Chinese market.
In the PC sector, we are the world’s largest in terms of shipments for 10 quarters. Currently, we hold 21 percent of the global market and are targeting 30 percent of the market outside of China.
Lenovo will continue growing in the global PC market by providing more innovative products and better user experiences. You have been very active on microblogs since 2014, and you have urged other Lenovo executives to try marketing on social media. What are your takeaways from this experience?
After launching my microblog for a year, I find that Chinese netizens like to comment on topics regarding myself. For example, my hairstyle had received a lot reviews lately.
I log on to Weibo everyday to check netizens’ comments. There is no doubt that social media is a great platform to post information related to Lenovo’s businesses. What do you do when you are free?
I have a fairly tight business schedule. Besides reading news and checking out microblogs and WeChat, I use my limited free time to play tennis and jog. Lefengpao (a step tracking app developed by Lenovo), is a very useful application that I indulge in. What kind of books have you been reading lately?
Much of my reading is devoted to articles about the IT sector. A part of the job of being the head of a multinational company is taking overnight flights. How do you adjust to jet lag?
I have no particular antidote on that, but I try to choose a midnight flight and take a good nap on the plane.