Lenovo, which is battling HP to become the No. 1 PC seller worldwide, is dividing its business into two units under the names Lenovo and Think, Chairman and CEO Yang Yuanqing told employees in an email late Saturday.

Since acquiring IBM’s personal PC division, which was largely based in Raleigh, in 2005, the largely China based company has steadily climbed to the top of the global PC market where some data shows it has surpassed HP as the top company.

However, Yang, who recently moved back to China from a home he had established near Lenovo’s executive management headquarters in Morrisville, said Lenovo must divide into two groups in order to improve its brand recognition in higher-end markets. In the email, which was first disclosed by China media late Saturday, Yang said breaking the Think brand, which it inherited from IBM, away from Lenovo will help Lenovo compete better against Apple.

The Lenovo unit will focus on consumers and small business as well as mobile devices and phones, Yang said.

What impact the changes might have on jobs was not made clear in the email, although Yang said corporate responsibilities would remain the same.

Lenovo recently rose to No. 3 worldwide as the seller of “smart-connected devices,” and Yang has made mobile Internet connectivity as well as smart TVs a major priority in his goal of making Lenovo less reliant on PCs for sales. The company now offers a wide range of desktop and laptop PCs, recently launched a joint venture with EMC targeting servers, is rolling out smartphones in more markets outside of China, and builds smart TVs. 

The two newly formed units will operate under the Lenovo Group umbrella.

The changes take effect April 1.

“The restructuring inevitably have to take up all the time and effort,” Yang said in the email that was published by Sina news. The email was translated through Google.

Yang stressed the decision is part of his “defend and attack” global strategy of defending markets where Lenovo is dominant, such as China, and growing in emerging markets as well as more established economies such as in the U.S., Europe and Japan. Over the past two years, Lenovo has pursued acquisitions and partnerships to maintain its rapid growth.

“[W]e must unswervingly implement the the fists – strategic defend + offensive – to maintain the victories, and continue to make new breakthroughs,” Yang wrote.

“We must not waver, is critical to the success of our results for the quarter and the fiscal year.

“At the same time, we need to plan for the future. Let us take full advantage of the efficiency and innovation of the new organization, to continue to win the victory, achievement of long-term goals, and ultimately built to last!”

Lenovo faces intense competition from Apple in China for tablets, PCs, laptops and phones. While Lenovo’s relatively new LePhone smartphones are gaining market share, Samsung is the top seller as it is worldwide and Apple’s iPhones are big sellers. The latest iPhone models are now being introduced in China. Lenovo executives have said they will sell smartphones in the U.S. at some point in the future. It is slowly expanding sales beyond China.

Liu Jun, senior vice president and head of the company’s New Mobile division, will head the Lenovo group.

Peter Hortensius, senior vice president and head of the Product division, will head the Think group.

WRAL News has reached out to Morrisville-based executives for comments about the report.

Over the past year, Lenovo has made other organizational changes, including the forming of an executive committee to advise Yang and the geographic breakdown of markets as well as who will manage them.

Gerry Smith, one of Yang’s top advisors, recently was named president of North American operations and is based in Morrisville. He also is a member of the executive commitee.

(Bloomberg news contributed to this report.)