Lenovo: why the world’s biggest PC maker isn’t really a PC company any more

Lenovo is an anomaly in the PC space. While the market as a whole has struggled with declining growth, the Chinese tech giant has grown both its sales and marketshare. In fact, according to the latest stats from Gartner, Lenovo now owns nearly 20% of the global PC market.

It’s managed to get to that position through a combination of smart acquisitions (most notably IBM’s PC division), improvements in the quality of its products, and applying the lessons from its Chinese growth to other emerging markets.

Despite that, and despite the fact that PC sales still account for 64% of its revenue, it’s no longer really fair to call Lenovo a PC company.

Going mobile

The most obvious area in which Lenovo has diversified from PCs is in the tablet and smartphone space. As well as as its own brand devices, it owns Motorola, having taken it off Google’s hands in 2014.

Neither brand has received all that much play in the Western tech press since the acquisition but sales of both have seen it catapult into third place in global smartphone shipments.

It’s still some way behind Samsung and Apple, but its marketshare is growing and it may well start eating into their slice of the pie.

Its approach on that front is actually pretty interesting. Rather than consolidating the brands, Lenovo plans to keep both separate.

Motorola is there primarily for branding purposes and, according to Lenovo’s president for the EMEA region Eric Cador, most Western countries will only receive Motorola devices. It’s a familiar brand and has a lot more clout in those markets than Lenovo would on its own.

Cador also confirmed that the popular Motomaker feature, which allows you to customise your device before sale will also be rolled out in a number of markets.

In emerging markets, both brands are expected to ship — especially in countries where Motorola previously had some kind of a footprint.

In many ways, it’s a similar approach to the one it used so successfully in the PC space. And it’s starting to bear dividends too. Lenovo’s latest results indicate that 43% of its income in the EMEA region was non-PC.

Of course, that figure also includes tablets. In that space too, Lenovo sits in third place. And while its efforts haven’t always been popular with reviewers, it is at least innovating with features like round grips-cum-kickstands and built-in projectors.

Head in the clouds

Lenovo also has some fairly big plans for the cloud, enterprise and server space. Thanks largely to its 2014 acquisition of IBM’s x86 server business. Right now it’s a very small part of its business and its some way behind even its Chinese competitors (such as Huawei), but the space as a whole is growing and if Lenovo can gain the trust of users outside China — something its consumer products will undoubtedly help with — then it stands to gain massively.

In fact, that interplay between its consumer and business products speaks to the kind of company Lenovo is trying to become.

According to Tong Fuyao, head of Lenovo China, the Chinese tech giant is transforming from a hardware company to a hardware, software and cloud services company.

Rather than just having customers buy a device and move on, the plan is to get customers into an ecosystem which is as intuitive to them as it is to the third-party software companies Lenovo works with. If you’ve ever bought anything from a certain Cupertino-based company, this will sound familiar to you. Heck, it’s even got a similarly detail-oriented approach to its retail stores.

“We have a huge investment in our other sectors, including IT support,” Fuyo told a media roundtable in Beijing. “We try to view ourselves as part of the ecosystem with our third party software providers. Importantly, we’re trying to provide our customers with a total solution.”

Now, make no mistake, there’s still a long way to go before Lenovo attracts the kind of devoted fandom that Apple does, but if it can match its formula in the PC space with more smart acquisitions in the other areas of its business, then it’ll certainly be on the right path.

Also, unlike many of the companies trying to adopt the same model, it’s got major home-ground advantage when in China — the market everyone else is chasing.

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Stuart Thomas is in Beijing courtesy of Lenovo