Why can Lenovo achieve reverse growth?

Absrtact: Lenovo Group continued to rise in market share, but Lenovo Group chairman and CEO Yang said: "This (PC market share) is not the most important, the important thing is the company in the new product areas of the ability to expand." November 7, Lenovo released the first

Lenovo Group's market share continued to rise, but Lenovo Group chairman and CEO Yang said: "This (PC market share) is not the most important, the important thing is the company in the new product areas of the ability to expand."

November 7, Lenovo released the second quarter as of September 30, 2013 (the third quarter of the natural year) earnings. Earnings showed Lenovo's share of the global PC market reached 17.7%, the world's largest PC supplier for two consecutive quarters, up 2% per cent year-on-year.

Why can Lenovo achieve reverse growth? Independent analyst Sun Yongjie that the main reason is the strategic judgment is correct, that is, the PC market is still a huge market, there is a certain amount of innovation space, when competitors will be the PC into sunset industry, give up the investment, Lenovo continued to adhere to the innovation of PC products, regardless of the super, multi-mode notebook, Lenovo are walking in other Front of the manufacturer.

"After becoming the first place in the global PC market, Lenovo's goal became the first in the PC market," Yang said in an interview with Economic report 21st century. "PC market" does not have an exact definition, currently includes "PC Tablet PC + Smartphone", the future also includes Smart TV and other intelligent terminals.

In the "PC Tablet PC + Smartphone" market, the company ranked in front of Lenovo is Samsung and. Yang said Lenovo Group's new goal is to gradually surpass the two companies, become the "PC market" first.

Persistent PC success

Lenovo has sold 29 million devices worldwide, creating a record high. Lenovo's success was achieved in a slump in the PC industry. Data from IDC, a Third-party data provider, showed that global PC shipments fell 7.6% in the third quarter.

Shipments in the PC industry have fallen for several consecutive quarters: the PC market experienced its biggest decline in the first quarter, PC shipments fell 13.9%, and the second quarter fell 10.9% year-on-year.

Lenovo's main rivals have shown mixed performance. According to IDC, in the third quarter of 2013, the world's second-ranked market share was 17.1%, an increase of 0.4% per cent, and a third-place 11.7% per cent growth of 0.3%, the first growth since the fourth quarter of 2011.

Another two rivals, Taiwan's Asus and Acer, have seen a significant decline, with Acer's worldwide PC shipments down 34.5% per cent compared with the same period last year, while Asus fell 34.1% per cent.

Lenovo insists on the innovation of PC products in the context of the global decline in PC sales. Its main rivals have made different choices from Lenovo, or given up, or swung, or made the wrong bet.

The former global PC King Hewlett-Packard was once ready to sell the PC business to the software and services, after Whitman as HP CEO, choose to return to the PC, the strategic swing of the HP market share is falling. Dell is determined to transform IT solutions, software and services, the PC from the main industry to become a non-main industry, the cold shoulder. Acer is a staunch reformer, but it has put all bets on netbooks.

Lenovo became the king of the PC, in addition to Lenovo stick to the PC, but also due to the failure of the competitors.

Yang said he is bullish on the development of the PC market. "The global PC market has fallen for three consecutive quarters and will be warm in the second half of next year," Yang said in an interview with the Economic report 21st century. The IDC report predicted that the global PC market would get warmer as early as 2014 years.

Yang's reasons are two: first, the rigid demand for corporate procurement has warmed up; the second is a new rotation of the machine, most users start to upgrade Windows XP operating system to Windows 7 or Windows 8, operating system upgrades will pull PC hardware product sales.

Yang also believes that PC sales continue to decline, but also because of the impact of the tablet computer, the current Tablet PC market impact has returned to normal. According to IDC, the third quarter of this year compared with the second quarter, tablet computer shipments flat, no growth in the chain.

Overtaking Road Map

Become the world's largest PC product provider, Yang designed a "three-step" overtaking roadmap: The first step is to become the world's largest PC manufacturer; The second step is to become the world's largest "PC tablet computer" provider, Lenovo ranked second, Apple ranked first, and the third step, to become the world's largest "PC Tablet PC + smartphone provider, Lenovo Group is currently ranked third in the world.

With PC growth slowing or even growing negative, the implementation of the "three-step" strategy by Yang will require more market share in both the tablet and smartphone sectors.

In the tablet market, Lenovo is ranked fourth in the world, with Apple, Samsung and Asus among the top three manufacturers. Lenovo has grown rapidly in tablet computing, with Lenovo selling 1 million PCs a year in the first quarter of this year, reaching 2 million units in the second quarter.

Chen Xudong, senior vice president and China general manager of Lenovo Group, said in an interview with the Economic report 21st Century: "In 2013, the goal of the tablet was to sell out 10 million units." ”

Smartphones are also ranked four of the world's top three companies-Samsung, Apple and Nokia. Yang said the development roadmap for Lenovo's smartphones is also three-step: the first step is to achieve the scale, the means to enter the middle and low-end mainstream products market; The second step is internationalization, Lenovo smartphones are mainly sold in the Chinese market, will be overseas sales, the third step is to enter the high-end market.

The road map for Lenovo's expansion is this: From PCs, tablets, smartphones, smart TVs, to more intelligent terminals in the future. The logic of expansion is that computer technology will migrate from the PC, Tablet PC, Smartphone, to smart TV and other intelligent terminals, until it is everywhere.

Yang said that in addition to the above overtaking path, Lenovo plans another overtaking route, Lenovo will no longer be a hardware manufacturer, Lenovo will enter the software, applications and services and other fields. According to Yang's description, Lenovo's product model is "triathlon (software + hardware + Internet applications and Services)", Lenovo future to their own positioning of a "device and service provider."

Lenovo is now doing a lot of layout. "Lenovo's operating system is based on the deep customization of the native Android system," said Yang. "Lenovo Music stores now download up to 20 million a day, the cumulative download application more than 3.5 billion times, Lenovo also provides a lot of Internet applications and products, including security. ”

Yang specifically referred to security, he said that the current market for Third-party security manufacturers (including 360, Jinshan network and other companies to provide security products) are not safe. In his view, hardware manufacturers based on hardware to develop hardware to achieve "real security."