Apple and Samsung as well as China-based Xiamoi are about to face more direct competition from Lenovo in the continuing battle for dominance of China.
Lenovo is putting a new spin on its “protect and attack” strategy by doing a lot of both in its largest market.
How important is this venture to the world’s No. 1 PC manufacturer?
A new company led by the top executive for China and other Asian markets is being formed for launch next April. Two other senior Lenovo executives will serve as co-chairman.
Lenovo recently began absorbing IBM’s x86 server business, which has a substantial presence in China and was bought for some $2.1 billion. And still awaiting regulatory approval is Lenovo’s Google Motorola Mobility buy of nearly $3 billion.
The two deals swell Lenovo’s headcount and its product lineup. And this new venture is the latest reorganization of management as Lenovo searches for a winning formula to maintain its sales momentum while at the same time keeping order in the ranks.
But to make sure Lenovo remains focused on matters in the country where it was born, Chairman and CEO Yang Yuanqing is backing the setup of the new venture.
Yang is the author of the “Protect and Attack” strategy, which dates back to 2011.
Stay No. 1 in China in PCs was the initial goal. Now, China must protect and grow its smartphone business (No. 4 globally) where it stands No. 3 behind China-based Xiaomi and Samsung. Apple has less than 10 percent of the market, but its iPhones have a real “bling” factor.
What the new venture will be called and how will it be branded will be disclosed later, Lenovo says.
“The objective of this move is to help Lenovo attack the fast growing consumer mobile device market in China, with a focus not only on devices, but also on software and application development and close customer engagement,” Lenovo said in an announcement out of Hong Kong.
“Currently Lenovo has a leading smartphone business, which sells mainly through open market sales and carrier relationships. While Lenovo has and continues to strengthen its own company-branded online channels as part of its go-to-market strategy, the new company will exclusively focus on direct-to-consumer sales, marketing and product development using an internet-based business model.”
Leading the new venture will be Chen Xudong, who is Lenovo’s president for China and Asia Emerging Markets, which includes Hong Kong but not Japan.
“He has substantial marketing, sales and operational experience, and a proven track record in building Lenovos China business to record levels in PC, tablet and smartphone,” Lenovo noted.
Co-chairmen will be Liu Jun, who leads Lenovo’s Mobile Business Group, and George He, the leader of Lenovo’s “Ecosystem and Cloud Services Group.”
As Liu leaves, his old job will be split into two parts. The new leaders of the China and Asian Emerging Markets will report separately to Lenovo Chief Operating Officer Gianfranco Lanci.
Chen is one of Lenovo’s most veteran leaders, having joined the company in 1993 – 12 full years ahead of the deal that put Lenovo on the global stage: It’s buy of IBM’s PC division. Before taking over the combined China-Asian markets job, he was president of Lenovo China.
His Lenovo resume spells out Chen’s rising importance at the company:
“Mr. Chen joined Lenovo in 1993, and served as various leading roles including Regional Sales, Commerce, Quality, and Channel Management. He was appointed as vice president of Lenovo Group in April 2005, and took charge of Lenovo’s channel sales and consumer business for Asia Pacific in 2006. From December 2008 to December 2009, he was responsible for the strategy and operations of Lenovo’s Asia Pacific and Russia regions, and then moved to Lenovo’s Emerging Market Group. Mr.Chen has served as the general manager of Lenovo China region since December 2009, and was appointed to senior vice president of Lenovo Group in October 2011.”