Lenovo is known as the world’s biggest PC Company. It still continues to gain marketshare in the PC world. However, Lenovo has comes to terms with the fact that the PC Industry overall is shrinking. The growth is in other electronic devices like tablets, smartphones, smart watches, among other electronic devices. While Lenovo in recent years has become a diversified tech company in China and certain other emerging markets, in the US and Western Europe it still basically sells PCs and tablets. That has changed as of Jan. 2014.
The first big change into going post PC is Lenovo is repeating 2004. 2004 is the year Lenovo purchased IBM’s PC division. At that time IBM was unloading much of its hardware division, and it sold its PC division to Lenovo. The purchase was a big success for Lenovo, and it helped lead to Lenovo becoming the world’s biggest PC vendor. Now IBM is getting rid of most of its remaining hardware division. In Jan. 2014, IBM made a deal to sell Lenovo its X-86 server division. Servers have higher profit margins than PCs, and this instantly makes Lenovo the world’s 3rd biggest server dealer. IBM’s service division also has agreed to market servers and storage gear made by Lenovo to it’s customers. Having the higher profit margins from the server business will allow Lenovo to put a lot more money into research and development. It also raises the profile of Lenovo in the corporate sector as a supplier of IT needs. It also comes at a time when the biggest buyers of servers, cloud service companies like Facebook, Amazon, and Google buy their servers in bulk volume from Asian manufacturers. And Lenovo is based in China. By shifting production and research and development to China, Lenovo can rapidly increase profits for the server division.
The next major post PC transformation undergoing is Lenovo’s purchase of Motorola Mobility from Google. Lenovo is buying not only the hardware operations, it’s buying 2000 patents from Google as well as licensing others. Prior to this purchase, Lenovo sold smartphones primarily in Asia and in Africa. Motorola has a much bigger reach, as it has smartphones for sale in North and South America, Europe, and India. Thanks to its purchase of Motorola, Lenovo will now have global reach. Having much bigger scale will enable Lenovo to cut costs on material procurement, research and development, sales, human resources, and a number of other functions. Lenovo will keep the Motorola name, as in the last year Motorola came out with acclaimed products such as Moto X and Moto G. In addition to making Lenovo much bigger in the smartphone sector, acquisition of Motorola puts Lenovo in the smart watch sector as well. Motorola has been working on a new smart watch that it is releasing later this year. Lenovo has instantly become a powerhouse in consumer electronics.
With its new offerings, Lenovo can offer big companies a full spectrum of devices. By being able to offer servers, storage gear PCs, smartphones, and tablets Lenovo is able to take care of big part of the corporate sectors IT needs. Lenovo is also becoming a powerhouse in the consumer electronics, able to offer multiple devices for different consumer needs.