MORRISVILLE – The outlook is grim for global tech giant Lenovo, reports Bloomberg News with analysts saying shareholders should sell after concluding they don’t see much of a chance for a turnaround. Even its chairman is grim.
“How many mistakes have we made? How many mistakes have I myself made?” said Liu Chuanzhi, Lenovo’s founder and chair of Lenovo parent Legend Holdings Corporation, recently. “Without question, today’s Lenovo Group faces severe and acute challenges. The challenge is multi-dimensional and uncertain. It’s an age when innovations in technology and business model are powerful enough to overturn an industry and even social customs.”
Lenovo, which operates global headquarters in Morrisville and Beijing, has fallen on hard times since acquiring IBM’s lower-end server business from IBM and the Motorola smartphone group from Google four years ago for some $5 billion.
It’s no longer the world’s top PC seller (HP is).
Lenovo also has struggled with server sales, and despite numerous product and management changes its smartphone performance no longer ranks among global leaders, according to various research reports. The server group is based in the Triangle.
“In four years, Lenovo Group Ltd. went from would-be Apple Inc. challenger to an also-ran in smartphones and datacenter servers. Now it’s got a comeback plan, but some investors don’t buy it,” Bloomberg reported Tuesday evening.
“China’s erstwhile tech darling, which lost its perch atop the PC market to HP Inc. in 2017, has shed two-thirds of its value since hitting a 15-year high in 2015. ”
Bloomberg says “all seven analysts ranked best” in its own ratings “urge investors to sell.”
The story notes that Chair and CEO Yang Yuanqing has “failed repeatedly to deliver on turnaround deadlines and hasn’t fully articulated a strategy to revive ailing mobile and datacenter arms – even as local rivals gun for its bread-and-butter Chinese customer base. The company’s even resorted to selling office buildings to prop up the bottom line.”
Noted one analyst: “I just don’t see signs of change.”
The full report is available online.
