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Lenovo Says ‘Worst Period’ Behind It

Yang Yuanqing, Lenovo Group Ltd. chairman and CEO. Photo: VCG
Yang Yuanqing, Lenovo Group Ltd. chairman and CEO. Photo: VCG

Chinese computer giant Lenovo Group Ltd. said it saw strong momentum in its personal computer (PC) and mobile businesses in the Americas last year, with chief Yang Yuanqing vowing to reclaim the top spot in the global PC market this year.

“The worst period is over,” Yang told around 1,000 attendees at the company’s annual motivation conference Tuesday in the U.S. He didn’t elaborate on what period this referred to.

Lenovo has to act like a “beast” that has been starved, so that “we can pounce and make gains” in overseas markets going forward, Yang said in a company statement.

The company saw strong results in North America and Latin America, where it was among the top three PC brands in 11 national markets, including Brazil and Peru, as well as among the top three smartphone brands in four markets, including Argentina and Mexico, the statement said.

The Hong Kong-listed giant is setting its sights on four key areas for 2018: a “return to the PC top spot without compromising profitability,” turning its mobile division into a “healthy business,” transforming its data center into a “sustainable, profitable growth engine,” and building a competitive edge for its artificial intelligence business.

That's according to a report by Lieyunwang.com, a Beijing-based technology news portal, which on Wednesday also posted slides that Yang presented at the U.S. event.

Lenovo became the world’s largest maker of personal computers after gobbling up U.S.-based IBM’s PC division in 2005, bringing under its wings the iconic ThinkPad laptops.

In 2014, Lenovo purchased Motorola Mobility to move into smartphones, and IBM's x86 server business to move into the database sector.

Last year, Lenovo lost out to HP Inc. by a slight margin in the global PC market, garnering a 20.8% share, according to research firm Gartner. HP commanded 21%, while Dell Inc. took the third place with 15.2%.

Lenovo's PC business remains solid and its data-center line is set to recover after restructuring efforts, but “the mobile business is still a major headache for the company,” Steven Tseng, an analyst with Daiwa Capital Markets in Hong Kong, said in a research note on March 23.

But by staying away from direct competition with its Chinese peers, and venturing into Latin America and North America, the average selling price of Lenovo’s smartphones has risen and its mobile division’s loss could be narrowing over time, he said.

Contact reporter Jason Tan (jasontan@caixin.com)

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