On the way to PC manufacturing, Lenovo still keeps moving fast

Absrtact: On the way to PC manufacturing, Lenovo still keeps moving fast. The Chairman and CEO of Lenovo Group, Yang, also handed over a good earnings report. November 6 Noon, Lenovo Group (00992.HK) released in the middle of fiscal year 2014-2015 (April 1, 2014 to September 30, 2014) performance, cut

On the way to PC manufacturing, Lenovo still keeps moving fast. The Chairman and CEO of Lenovo Group, Yang, also handed over a good earnings report.

November 6 Noon, Lenovo Group (00992.HK) released in the middle of the fiscal year 2014-2015 (April 1, 2014 to September 30, 2014) performance, as of September 30 three months, Lenovo Group revenue of 10.475 billion U.S. dollars, the year-on-year growth of 7% Net profit of 262 million U.S. dollars, an increase of 19%. In the six months ended September 30, Lenovo Group revenue of 20.87 billion U.S. dollars, an increase of 12%, net profit of 476 million U.S. dollars, the year-on-year increase of 21%.

In an interview with the 21st century economic reporter, Yang said Lenovo had become the champion of the "personal computer" market, the "PC tablet" market. The target, which was set in May this year, is scheduled to be completed within two years and is now completed in only two quarters, Yang said.

This is due to two factors, one is the rapid growth of tablet computer sales, the quarter reached 3 million units, the year cloak Rose 30.6%, the second is Lenovo Group's main business, that is, the PC business in China outside the region sales growth.

But sticking to PCs for a long time is still not the way out, because while PCs are still a big industry, they have lost momentum. The new business that Yang is coming up with will include mobile, enterprise computing and cloud services, especially cloud computing.

Smart Terminal sprint

November 6, Yang told the 21st century economic reporter, PC is still Lenovo Group's most profitable business. The market share of Lenovo's PC business increased 2.1% in the second quarter to an all-time high of 19.7%, accounting for 14.1% of the Tablet PC, according to earnings reports.

Lenovo's smartphone sales rose 38% in the year and continued to remain fourth in the quarter, but Lenovo was promoted to third place in the smartphone market after completing its acquisition of Motorola Mobile last week, cloak. IDC provides data showing that 2014 Q3 Lenovo shipped 16.9 million handsets.

After acquiring Motorola, Lenovo will be the world's third-largest expert maker, after Samsung and Apple, with 25.6 million shipments and 8.7% per cent of its market share (including Motorola).

How to consolidate the "King of the Pan-PC" position? In the traditional competition area of PC, Yang believes that Lenovo's advantage lies in manufacturing. On the one hand, by grasping the manufacturing link in the competition with the white manufacturers have a brand advantage, and the brand compared with the price advantage, in addition, Yang believes that Lenovo in the production of various links in the continuous discovery of "product innovation inspiration."

Lenovo's Tablet PC Q2 sold 3 million units, up 30.6% from a year earlier. In the tablet market, Lenovo ranked fourth in the global market for 5.7% in the first quarter, according to IDC's market-tracking data.

The next step of the "King of the Pan-PC" is to be the "King of Smart Terminals", the "PC Tablet PC + Smartphone" shipments worldwide first. Lenovo's data show that in the last quarter, Lenovo Group "Smartphone + PC + tablet" Total sales innovation of up to 35.6 million units, almost every second to sell five Lenovo products, is expected to exceed 100 million units in a year, but this is far from enough to rank third in the world.

Boosting handset sales is imperative. Emerging markets have strongly boosted Lenovo's smartphone sales. Compared with the same period last year, Lenovo's smartphone sales grew 38% year-on-year. A369i and A316 are popular in the Middle East, Asia-Pacific and Africa, according to IDC, which has two models priced below 100 dollars. Europe/Middle East/Africa is the region with the most eye-catching growth in the second quarter, accounting for 29% of Lenovo's total global turnover.

How to further develop the mature market is the new test that Lenovo faces. Lenovo Group Mobile Business Group president, Motorola Mobile Management Committee chairman Liu June told the 21st Century Economic report Reporter: "Lenovo will take advantage of Motorola's patent accumulation in wireless communications, to open up a mature market." ”

Apart from the patent, Liu June believes that the greater significance of the acquisition is that Motorola Mobile 2000 engineers will be under the Lenovo Group.

Lenovo's "three Ladders"

Lenovo's immediate priority is to change Motorola's long-standing losses. Such a situation is no stranger to Lenovo, which claims to replicate the success of the PC field to the mobile business. In an interview, Yang said Motorola Mobility would be profitable in 4 to 6 quarters.

After the acquisition, Lenovo will make adjustments to Motorola's China capacity layout, including the production of Motorola in the existing Lenovo Wuhan industrial base. Lenovo in Wuhan's industrial base, capacity is expected to reach 100 million mobile devices, the plant's head told the 21st century economic reporter, the Wuhan base is expected to undertake the production of Motorola Mobile equipment early next year.

"By reducing the cost of materials, Lenovo will increase the gross margin of Motorola Mobility in the mobile phone business." "said Yang. For Lenovo's mobile business, the completion of the acquisition of Motorola Mobile will gain Motorola's patent accumulation advantage in wireless communications.

China's smartphone competition is fierce, profits are playing very low, internationalization is very important. Yang's judgment is that smartphones are in the middle of a fast-growing Chinese market, and that China's share of the global market will also fall, with the acquisition of Motorola favorable Lenovo to expand into a lucrative overseas market.

Lenovo also needs to get out of the low margins of low-end models. The acquisition of Motorola could help Lenovo get a patent, and a high-profit high-end model for the market would help boost its mobile-phone product's gross profit margin and make up for its high-end flagship smartphone vacancy.

Moving is not a future business, it is now. Where is Lenovo's future?

In the past two years, Lenovo has successfully established and developed a leading global mobile business and enterprise-class business and laid the groundwork for rapid development of ecosystems and cloud services, Yang said. These three businesses now account for 15% of Lenovo's total turnover, compared with 4% in three years ago.

Yang said business-class growth was strong and sales rose by 35% per cent in the year cloak, which launched a new generation of thinkserver products this September, while Lenovo store's "le store" downloaded more than 30 million a day, more than a year earlier.

The first step is the PC, the second ladder is mobile, the third ladder is enterprise business, ecosystem and cloud services, this is Yang for Lenovo Group planning three business gradients, the PC represents the past, mobile representative of the present, enterprise-class business, ecosystem and cloud services represent the future.