Lenovo Group Ltd. (LNVGY) has only just started in the U.S.
The Chinese computer firm, which is known for its ThinkPad PC line, is
slowly working its way toward the American consumer market with what he
says is a thoughtful, if slow, approach that will culminate in the
company's first high-end PCs for the U.S. market later this year.
'We have the best products in commercial space with the Think brand,'
said Yang Yuanqing, Lenovo's chief executive, in an interview at the
Consumer Electronics Show here. He plans to rely on the popularity of
his company's well-regarded business computers to start selling high-end
PCs.
Lenovo's growing focus on the U.S. market comes as it has begun to
solidify its standing as the world's top PC manufacturer. The company
was relatively unknown in the western world before it purchased
International Business Machines Corp.'s (IBM) ThinkPad PC business
nearly a decade ago. Since then, Lenovo has steadily grown its business
to become the biggest PC maker by some measures.
Now, Mr. Yang said, the company has the scale and capital necessary to
ramp up investments in the U.S. market. Last year, Lenovo released its
'Yoga,' a touch-screen PC whose hinge allows the screen and keyboard to
be bent into various positions, such as from a standard clamshell laptop
to a tablet, with the keyboard folded beneath the screen. This year, it
unveiled a 27-inch touchscreen desktop whose stand can fold inward,
allowing it to lay flat and be used like a touchscreen table.
With products like the Yoga, Lenovo has been able to grab more than 40%
of the U.S. retail market of computers priced at least $900 that run
Microsoft Corp.'s (MSFT) Windows 8. 'We are making a lot of progress,'
he added, noting that Lenovo has outgrown its competitors for the past
couple of quarters.
But he said there is opportunity in the high-end. Apple Inc. (AAPL) is
considered a premium brand whose designs and manufacturing quality are
rarely matched. Mr. Yang said he wants Lenovo to expand its consumer
brand and to increase competition with Apple and other high-end computer
designs later this year.
'We still have room to enhance the design,' he said. 'To develop premium
products, you have to drive innovation and driving the texture and
engineering to extreme.'
Lenovo is up to the challenge, he said, adding that every time he has
seen a prototype product, 'I just think it's amazing.' But when the
final device comes out, it isn't as nice-looking as the prototype
because cost concerns led the company to reduce the device's quality. He
says that will change this year.
Eventually, he said, Lenovo will offer a smartphone for the U.S. market.
But to get there, he said, Lenovo has grown its share of devices in
emerging markets, where the Lenovo brand is stronger. He said Apple and
Samsung Electronics Co.'s (005930.SE, SSNHY) war chests are much larger,
allowing them to do things in parallel and sell many devices into the
market. He also noted the iPhone maker does have a home-field advantage.
But he said he believes there is opportunity in the U.S. market, and he
will approach it slowly by building the Lenovo brand with its consumer
PCs like the Yoga and Horizon.
'We can't do everything together; we don't have that much money,' he said. 'But the smartphone is probably the next step.'
He said he isn't concerned about the recent scrutiny of other Chinese
tech companies, like Huawei Technologies Co., and said Lenovo has
focused on growing its business while being as transparent as it can.
'This is a normal situation,' he said. 'In every country, they are more comfortable with working with a local company.'
But he hopes the U.S. won't take a protectionist stance, adding the
Chinese government has purchased many American products even when
equivalent local ones exist.
For Lenovo's part, he said a recent decision to open a manufacturing
plant in North Carolina will not only bring more Lenovo offices to
American shores, but it will help meet its customer's needs by producing
special configurations of desktop and laptop computers much quicker,
and more efficiently, than shipping them from overseas.
The manufacturing plans will also create as many as 300 jobs, and
possibly more, he said. 'If we can have more market share, if we can
have more customers, definitely we will increase employees.'
The strategy of manufacturing specialized desktops, laptops and servers
closer to customers isn't just a U.S. phenomenon. He said Lenovo has
also built facilities in Japan, India and Brazil, and it's considering
more as it seeks to please customers and grow research and development
for individual markets.
'For Lenovo, scale is a key consideration,' he said. 'We are now big enough to provide this service to our customers.'
|