Lenovo

Business structure

As of May 2019, Lenovo's business structure is divided between the following core divisions:

• Lenovo PC & Smart Device Business (computers, large-sized, smartphones tablets, gaming devices, home electronics);
• Lenovo Data Center Group (servers, storage systems, software, services).

Lenovo in Russia and the CIS

Main article: Lenovo Russia

Employee salaries

The average salary in the Lithuanian division of Lenovo Technology B.V. according to June 2017 is 8,200 euros per month It^[1].

Performance indicators

Main article: Lenovo financials

2023: Revenue drops 14% to $61.95 billion as demand for PCs and smartphones collapses

According to the results of the 2022-2023 financial year, which ended on March 31, 2023, the Chinese multinational corporation Lenovo Group received revenue of $61.95 billion. This is 14% less than the result for the previous fiscal year, which amounted to $71.62 billion. Such data are reflected in the report published on May 24, 2023.

According to Lenovo, the fall is associated with a sharp reduction in demand in the consumer segment against the background of the current macroeconomic situation and high inflation. Customers around the world have begun to save on new desktops, laptops, smartphones and other equipment.

The fall in Lenovo sales is associated with a sharp decrease in demand in the consumer segment against the background of the current macroeconomic situation and high inflation

In the division of Intelligent Devices Group (IDG), which combines the business of producing PCs and smart devices, revenue in the 2022-2023 fiscal year amounted to $49.37 billion. For comparison: a year earlier, sales reached $62.31 billion. It is noted that Lenovo was able to maintain its leading position in the global personal computer market with a share of about 23.2%. At the same time, premium products brought in approximately 30% of the total revenue of the IDG group.

The Solutions and Services Group (SSG) division, which includes all Lenovo IT solutions and services for PCs, as well as additional services, showed revenue of $6.66 billion, which is 22% more on an annualized basis ($5.44 billion in the 2021-2022 fiscal year). Another approximately $9.76 billion was provided by the Infrastructure Solutions Group (ISG), which supplies infrastructure products to organizations and business customers: year-on-year growth was recorded at 37% ($7.14 billion a year earlier).

The report also states that Lenovo's net annual profit was approximately $1.61 billion against $2.03 billion a year earlier. Thus, the fall was at around 21%.^[2]

Revenue growth by 18%, to $71.62 billion, profit - by 63%, to $2.15 billion

At the end of the 2021-2022 financial year, Lenovo earned a record $71.62 billion in revenue, which is 18% more than a year earlier. The net profit of the Chinese company also turned out to be the maximum for all time - $2.15 billion. This is 63% higher than the profit of a year ago.

The Lenovo Intelligent Devices Group division, which takes into account sales of personal computers and smartphones, registered annual revenue of $62.31 billion against $53 billion for the previous reporting year. As noted in the company, the turnover updated the record, despite the numerous difficulties faced by Lenovo, namely, with the problematic supply organization, weak demand for IT equipment in the educational sector and lockdowns amid the COVID-19 coronavirus pandemic. In fiscal 2021-2022, sales of Lenovo gaming computers increased by 37%.

Revenue growth by 18%, to $71.62 billion, profit - by 63%, to $2.15 billion

At Infrastructure Solutions Group data centers , Lenovo's annual revenues increased from $6.3 billion to $7.14 billion. In the direction of IT Solutions and Services Group, annual revenue rose from $4.19 billion to $5.44 billion.

Lenovo sales in the Chinese market in 2021-2022 increased by 29% compared to the previous year, in the countries of the North and South America - by 24%, in the region EMEA (,,) Europe- Middle East Africa by 15%. At the same time, in the Asia-Pacific region, the company's revenue decreased - by 1% - largely due to a drop in the supply of computers the Japanese to educational institutions.

The Lenovo report also states that during the 2021-2022 fiscal year, the company spent more than $2 billion on research and development (+ 43% compared to the previous year), which was an absolute record for the manufacturer^[3]

2021: Revenue growth by 18%, to $71.62 billion, profit - by 63%, to $2.15 billion

At the end of the 2021-2022 financial year, Lenovo earned a record $71.62 billion in revenue, which is 18% more than a year earlier. The net profit of the Chinese company also turned out to be the maximum for all time - $2.15 billion. This is 63% higher than the profit of a year ago.

The Lenovo Intelligent Devices Group division, which takes into account sales of personal computers and smartphones, registered annual revenue of $62.31 billion against $53 billion for the previous reporting year. As noted in the company, the turnover updated the record, despite the numerous difficulties faced by Lenovo, namely, with the problematic supply organization, weak demand for IT equipment in the educational sector and lockdowns amid the COVID-19 coronavirus pandemic. In fiscal 2021-2022, sales of Lenovo gaming computers increased by 37%.

Revenue growth by 18%, to $71.62 billion, profit - by 63%, to $2.15 billion

At Infrastructure Solutions Group data centers , Lenovo's annual revenues increased from $6.3 billion to $7.14 billion. In the direction of IT Solutions and Services Group, annual revenue rose from $4.19 billion to $5.44 billion.

Lenovo sales in the Chinese market in 2021-2022 increased by 29% compared to the previous year, in the countries of the North and South America - by 24%, in the region EMEA (,,) Europe- Middle East Africa by 15%. At the same time, in the Asia-Pacific region, the company's revenue decreased - by 1% - largely due to a drop in the supply of computers the Japanese to educational institutions.

The Lenovo report also states that during the 2021-2022 fiscal year, the company spent more than $2 billion on research and development (+ 43% compared to the previous year), which was an absolute record for the manufacturer.

^[4]

History

2024: Top manager Yermek Zhakipzhanov killed in Kazakhstan

On October 10, 2024 Almaty region Kazakhstan , the body of 42-year-old top Lenovo manager Yermek Zhakipzhanov was found with signs of violent death. A criminal case has been opened into the murder. More here

2023: Lenovo bought FCNT

On September 29, 2023, Lenovo announced an agreement to acquire the assets of FCNT (formerly a division of Fujitsu), a company that manufactures smartphones under the Arrows and Rakuraku brands in Japan. The financial terms of the deal were not disclosed, but it is said that it will help the Chinese Lenovo in further strengthening its position in the Japanese mobile market. Read more here.

2022: Hungary's first European factory opens

On June 14, 2022, Lenovo announced the launch of its first manufacturing facility in Europe. The plant is located in Ullo, near Budapest (Hungary). The factory will manufacture servers, storage systems and workstations. According to the company, the new plant will create powerful economic potential for both the private and public sectors of Hungary.

At the launch point, the plant employs a total of more than 1,000 full-time employees, and, according to the company, the number will grow as the enterprise reaches full capacity.

Lenovo opened the first European plant in Hungary. Servers will be produced there

{{quote 'Francois Bornibus, Senior Vice President and President of Lenovo EMEA, said: Thanks to the good location of Hungary, we have become much closer to our European customers, which allows us to meet and support their needs while remaining at the forefront of innovation. }} Bornibus noted that this plant will play a key role in more sustainable, faster and efficient adoption of smarter technologies in Europe.

{{quote 'We are pleased that Lenovo, an industry leader with a long history in global manufacturing, has chosen to partner with us and locate its new facility in Hungary. After the official opening of the facility, we expect new cooperation opportunities for local suppliers, contributing to the prosperity of Hungary's economy, "said Robert Esik, CEO of the Hungarian Investment Attraction Agency (HIPA). }} The new production site with an area of ​ ​ about 50 thousand square meters. m, occupying two buildings and three floors, is one of the largest production enterprises of Lenovo. It can produce more than 1,000 servers and 4,000 workstations a day.

The buildings have 0.5 megawatt solar panels, enough to power a small village. The production of devices so close to central Europe also significantly reduces the kilometer of cargo transportation, providing more environmentally friendly transportation options. Solar combined with innovative manufacturing processes will also help Lenovo meet its climate goals, the company said.

The Hungarian plant is part of Lenovo's global manufacturing and supply chain strategy, serving customers in 180 markets from more than 35 manufacturing sites worldwide, including sites in, To Argentina,, Brazil,, China,,, and Germany Hungary. India Japan To Mexico USA^[5]

2020: Lenovo seeks women. Especially acute shortage - in the division of data centers

Positioning itself as a global company, Lenovo has set a goal of reaching 20% in terms of the number of women in the leadership team in 2020. This is stated in her Diversity and Inclusion Report, published at the end of 2019. In 2019, the indicator was already close to the target - 18.5%, indicated in the same place.

In total, Lenovo employs about 57 thousand people, of which 36.2% are women, 27.4% of technical positions in the company are also occupied by women. With such indicators, the company was included in the 2019 Bloomberg Gender-Equality Index, presented by a list of 230 organizations.

Like many other large companies, Lenovo has taken care of inclusivity issues "(photo - Lenovo DCG)"

However, not in all areas of Lenovo's business are women represented in such numbers. For example, in the division for the production of solutions for DPC (Lenovo Data Center Group, DCG) in the region EMEA there are only 15% of women. This indicator was shared in January 2020 (Per Overgaard Per Overgaard), CEO of Lenovo DCG in the EMEA region. In total, in Lenovo EMEA, the percentage of women is 33.8% of all employees, TAdviser was specified in the company. The gap is evident.

The company told TAdviser it could not provide a total percentage of female employees across the Lenovo Data Center Group. But it can be assumed that it is also lower than the Lenovo average globally. The segment of data centers is one of the most "male" in the IT industry. For example, according to a 2019 Uptime Institute study, in a quarter of companies of various profiles working in this area, there are no women at all among the employees associated with the technology side of the business.

Speaking about the EMEA region, in particular, Per Overgaard told TAdviser that Lenovo DCG expects to increase the share of women in the division so that it meets the averages across Lenovo. At the same time, he stressed that the policy of diversity applies not only to women, but also to the inclusion of representatives of different nationalities in the staff.

Firstly, it is important to give everyone equal chances in terms of getting a job, and secondly, diversity in general helps the business of companies: people of different genders, from different markets, from different religions give an opportunity to see the situation, problem, strategy from a new angle. It's very valuable to the business, "Overgaard says.

The executive director of Lenovo DCG in the EMEA region added that, of course, when recruiting personnel, the company will continue to primarily focus on the professional skills of potential employees, and not on their gender or other factors. However, some changes may be introduced, such as in approaches to personnel selection, to attract more female candidates.

Lenovo published its first report on the diversity of personnel in 2018. At the same time, she first revealed a strategy in this area, although the company previously had separate programs to support and develop certain categories of employees. For example, since 2007, the Women in Lenovo Leadership group has been operating, available in 40 countries, which organizes various events, forums, counseling on career building, professional skills development, etc.

Some other major IT companies, including Google, Microsoft, Facebook and Apple, have already introduced the practice of publishing annual reports on the diversity of personnel in order to increase transparency. So, for example, Google published the first such report back in 2014.

2019:1% decline in revenue to $50.72 billion

In the 2019-2020 fiscal year, Lenovo raised $50.72 billion, down 1% from a year earlier. The company notes that its sales are above $50 billion for the second year in a row.

Lenovo's revenue has grown since 2016, but in the 2019-2020 fiscal year it contracted due to the COVID-19 coronavirus pandemic, which led to a shutdown of enterprises in China.

Lenovo financials

Over the past 12 months, the industry has faced a number of challenges, including geopolitical uncertainty, a shortage of component supplies, the impact of foreign exchange rates, and the coronavirus pandemic joined in the fourth quarter, Lenovo said.

Lenovo believes that the company's global presence can help it mitigate macroeconomic risks and support stable financial results. The massive transition to remote work and online education should contribute to a long-term surge in demand for computers and equipment for data centers, the company said.

In the meantime, the group will exercise disciplined cost control to optimize its liquidity and financial condition, Lenovo said in a statement.

In fiscal 2019-2020, Lenovo's computer division earned about $40 billion in revenue, up 3.6% from a year earlier. In the division responsible for the release of solutions for data centers, revenues decreased by 8.7%. The company does not give an absolute indicator.

In its report, Lenovo noted a 296 percent increase in revenue from sales of smart Internet of Things solutions, as well as a 43.2 percent increase in software and service sales (up to $3.5 billion).

At the end of the 12-month reporting period, which ended at the end of March 2020 calendar year, Lenovo's net profit amounted to $665 million, a decrease of 12% compared to profit a year ago.^[6]

2018

The court fined Lenovo for installing advertising software for 800 thousand laptops

At the end of November 2018, a district court in the northern district of California issued a verdict according to which Lenovo will have to pay a fine of $7.3 million for installing advertising software on its laptops. Lawyers estimated the damage to clients at $35 million.

A class action lawsuit against Lenovo was filed by a consumer group after Superfish's VisualDiscovery program was found in the Chinese company's computers , displaying special targeted ads in search results.

Superfish spyware was installed on new Lenovo laptops by default

The plaintiffs accused Lenovo of lying to them about the privacy of user data, as well as violating the Computer  Fraud and Abuse Act and Wiretap Act.

According to information security experts, attackers could exploit vulnerabilities related to VisualDiscovery to steal bank card data if the laptop is connected to an unprotected public wireless network, for example, in a cafe.

The money that the manufacturer agreed to pay to resolve the conflict will be distributed among users who sued Lenovo. How many customers are in question is not specified. Meanwhile, it is known that advertising software was installed on about 800 thousand laptops sold from September 2014 to January 18, 2015.

In addition to Lenovo, Superfish has also been fined - it will reimburse consumers about $1 million. Lenovo has ceased to cooperate with Superfish, although it initially denied the malicious nature of the program in public. The company later posted a warning on its website about the vulnerability of its computers to Superfish and published instructions for removing the program. The company also provided affected users with six months of free protection under the McAfee  LiveSafe program.

ON The American authorities were also interested in Lenovo's actions regarding the installation of a disguised advertising one. The company previously agreed with them by paying a fine and agreeing to conduct an annual audit and risk assessment at Lenovo.^[7]

Collapse of quotations due to news about spy chips in equipment from China

On October 5, 2018, the value of Lenovo shares during trading on the Hong Kong Stock Exchange fell by 22.8% compared to the previous day after information appeared in the press about the use of spy chips in equipment manufactured in China.

Bloomberg, citing 17 sources in intelligence and companies , reported that the PRC special services have built chips into the equipment of the American Supermicro. The company makes motherboards, power supplies and other equipment used by roughly 30 corporations, including a major bank, and many U.S. government departments. The purpose of the operation, according to these publications, could be to gain access to commercial secrets and government computer networks. As a result, Beijing could gain access to the internal networks of customers of Chinese companies.

Lenovo shares crash 20% after news of spy chips in hardware from China

Interestingly, Lenovo did not appear in the article. Moreover, as the Chinese company later stated, it does not cooperate with Supermicro in any format. But Lenovo shares collapsed, which analysts and market participants polled by Reuters explained by investor concerns that consumers and companies could reduce purchases of IT products from the Middle Kingdom.

The securities of the telecommunications equipment manufacturer also fell significantly (by 11%), and ZTE quotes, Supermicro which denies the installation of spy chips, fell by more than 40% by the close of the exchange on October 4, 2018.^[8]

Lenovo shares fell more than other Chinese companies because the United States makes up a significant part of their business, comments Linus Yip, chief strategist at First Shanghai Securities. - Stocks have risen just as strongly in recent months and hit relatively high levels. News of the uncertainty could prompt some investors to sell shares and turn a profit.

NetApp Agreement

On September 14, 2018, it became known that Lenovo entered into a partnership agreement with NetApp. The main goal of cooperation between the two companies is to create and promote technologies that will make it easier for companies of various scales to modernize existing IT infrastructures and accelerate their digital transformation. Lenovo and NetApp are ready to offer joint solutions to enterprises of all sizes that will allow customers around the world to modernize their IT infrastructures, both in local data centers and in the cloud.

The two companies are jointly developing a portfolio data storage data of Lenovo-branded products that combine NetApp management solutions ThinkSystem with Lenovo's hardware infrastructure. These products will be used by software NetApp and will be created at Lenovo's production facilities.

Lenovo and NetApp have announced a joint venture in China to deliver localized and engineered data storage and management products to the Chinese market. The joint venture expects permits from local regulators and will begin operating in the spring of 2019.

Lenovo consistently strives to build next-generation IT solutions - intelligent business transformation by expanding the range of offerings for data centers focused on current customer needs. To meet the needs of our customers, we partner with global companies in various segments of the data center solutions market.

The first solutions in this partnership - the Lenovo ThinkSystem DE and DM series storage system line - will be available for order in the near future^[9].

Lenovo has become the world's largest manufacturer of supercomputers

In June 2018, Lenovo became the world's largest manufacturer of supercomputers. The Chinese company received this status due to the fact that its systems took the most places in the Top500 ranking.

122 of the 500 most powerful supercomputers are manufactured by Lenovo. That is, the company's share is 24%.

The following asset Hewlett Packard Enterprise (HPE) includes 79 computer systems, and closes the top three (Inspur 68). Then located (Cray 56) and (55 Sugon).

Most of all in the list of Top500 - Lenovo systems

The authors of the Top500 collect data and keep statistics on high-performance computers. The rating is published twice a year. Lenovo's leadership statement was made at the International Supercomputing Conference in Frankfurt.

As the president of the server division of Lenovo Kirk Skaugen noted, the company two years earlier fulfilled the goal of turning into the world's largest supplier of supercomputers in the ranking of Top500 - the initial plans were for 2020.

By the end of June 2018, 17 of the world's top 25 research universities and institutes use Lenovo's HPC and AI solutions in their work, Skaugen said.

If Lenovo came out on top in terms of the number of supercomputers installed, then there are still no equal in terms of the total power of such equipment. IBM The company's systems in June 2018 accounted for almost 20% of the total performance of supercomputers. In second place in this indicator was Cray with a 16.5 percent result, in third - Lenovo with 12%.

Almost all supercomputers in the list (97.8%) are built on processors with eight or more cores, and more than half (53.2%) are built on processors with at least sixteen cores. Most often, Intel processors are used: they are installed on 476 systems.^[10]

Exclusion from the main exchange index in Hong Kong. Capitalization drop by 60%

In early May 2018, Lenovo's exclusion from the Hang Seng index was officially announced due to a sharp drop in the company's share price. The collapse of quotations is caused by the big problems of the Chinese manufacturer in the markets of smartphones and computers.

According to Reuters, citing a statement by Hang Seng Indexes Co., the decision to exclude Lenovo from the blue-chip index was made following a revision of the Hang Seng family of indices following the quarter ended March 30. Starting June 4, Lenovo's place in Hang Seng will be taken by Chinese drug maker CSPC Pharmaceutical Group, whose capitalization has increased by 29% since the beginning of 2018, showing one of the best results among Asian medical companies.

Lenovo and CSPC Pharmaceutical Market Capitalization Change Dynamics, Bloomberg Data

Lenovo first entered the Hang Seng index in 2000, but left it in 2006. In March 2013, it returned to the index, but since then the shares of the Chinese company have fallen by almost 60%, and the market capitalization has decreased by $5.9 billion. By the close of the exchange on May 4, 2018, the value dollars of the Lenovo security was 3.72 Hong Kong, which is 0.5% more than the day before. The vendor's market capitalization amounted to 45 billion Hong Kong dollars (about $5.73 billion), which is the smallest indicator in the index.

Ratio of Stock Value to Earnings of Computer Makers, Bloomberg Data

According to Bloomberg, Lenovo is trying to restore its business after the company lost ground in the smartphone market. In addition, things in the computer industry are deteriorating: in 2017, the Chinese vendor lost the first place in the supply of desktops and laptops on a global scale, and also found itself in outsiders in terms of the ratio of share price to income (see chart above).^[11]

The Japanese forced Lenovo to strengthen control over the quality of PCs

In March 2017, it became known that under pressure from buyers from Japan, the Chinese PC manufacturer Lenovo had to strengthen control over the quality of its products.

According to Nikkei, Lenovo is implementing patented acceptance control methods at six of its PC enterprises in China, including factories in Shenzhen and near Shanghai, developed by the company whose NEC PC business the Chinese vendor acquired in 2011.

Under pressure from buyers from Japan, the Chinese PC-manufacturer Lenovo had to strengthen control over the quality of its products

The NEC control system is applied at a factory in Yamagata Prefecture, specializing in assembling PCs for corporate customers, and provides for stricter verification, including the evenness of the label label and the absence of fingerprints on the device screen.

As part of the previous acceptance control technique, which was used at Lenovo's Chinese enterprises, only checked whether the PC starts as expected, and minor flaws, such as small scratches or crumpled packaging, were usually ignored. However, complaints from Japanese buyers have forced Lenovo to reconsider the policy, and now the quality of laptops and desktops designed to be sent to the Land of the Rising Sun is being tested more harshly.

Moreover, Lenovo, which has 40 production sites around the world, plans to introduce a Japanese quality control system at the rest of its enterprises and is going to use it for PC products shipped to other countries, Nikkei claims.

Lenovo has achieved success in the global PC market through mass production and competitive prices. However, in 2017, Lenovo's shipments fell 1.2% to 54.8 million units, as a result of which the company ceded the title of the world's largest computer manufacturer to an American competitor HP Inc. (data). IDC In order to rectify the situation, Lenovo seeks to improve the quality of products and increase the prestige of its brand.^[12]

Lenovo Data Center Group: Two SDN directions for telecoms and IoT

In February 2018, Lenovo announced plans to provide software-defined solutions for telecommunications and IoT infrastructure. The financial results of the DCG (Data Center Group) division in the last quarter, which became the most profitable in two years, gave impetus to the development of innovative solutions that can act as an alternative to traditional expensive systems.

Lenovo has made progress in DCG's performance, shifting its focus to customers who require hyperscale and supercomputer (HPC) solutions. The company pays attention to the development of cloud services and machine learning technologies, which allows customers to significantly simplify operational processes. The next stage of transformation is aimed at offering telecommunications and IoT solutions.

Building on the company's expertise in building hardware solutions for, Lenovo's DPC telecommunications business will focus on providing joint innovative platforms to develop customer-centric products. As global plans for network deployment expand 5G , Lenovo will partner with hardware and software solution providers NFV based on The Open Compute Project and other standards.

Lenovo's newly created IoT division will help transform customers' traditional end devices into Internet-connected smart mechanisms to improve performance and efficiency. Lenovo will offer its own server hardware in IoT solutions to expand their capabilities and create a range of platforms that can analyze large amounts of data for real-time decision making. At the same time, the company will work together with system integrators and other partners to bring full-fledged vertical solutions to the market.

2017

Lenovo bought Fujitsu PC business for $160 million

Lenovo announced in November 2017 that it intends to acquire Fujitsu a PC business, and the purchase price can maximum reach $269 million, according to the news resource Reuters and. CNews Of these, $157 million will be immediately paid in cash, the rest - depending on the success of the purchased company by 2020. Lenovo will receive 51% of the Fujitsu business, another 5% will go to the Development Bank. Japan The joint venture should be called Fujitsu Client Computing. The decision was made after Lenovo reported the most significant revenue growth in the last two years, and taking into account signs of stabilization of the PC market^[13]

According to the results of the quarter, which ended in September, Lenovo reported revenue of $11.8 billion, which is 5% more than in the previous year. The result exceeded analysts' forecasts, which were limited to $11.3 billion. At the same time, net profit amounted to $139 million, showing an annual decline of 11%. PC shipments were up 17% from the previous quarter. After the results were announced, the company's shares rose 5%, compensating for the previous decline.

Adware Installation Penalty

In September 2017, Lenovo agreed to pay a fine for settling proceedings over the sale of computers with pre-installed advertising software.

Since Reuters USA August 2014, Lenovo has installed a program called VisualDiscovery from Superfish on hundreds of thousands of its laptops to display pop-up advertisements to PC users, the news agency reported, citing a statement from the Federal Trade Commission (FTC). The app also blocked messages that typically appear in browsers when users try to open a potentially dangerous website.

Lenovo fined $3.5 million for installing adware in its computers

In addition, VisualDiscovery gained access to confidential consumer information, including Social Security numbers. True, this data was not sent to Superfish.

Lenovo compromised consumer personal data when it preinstalled software that could access confidential information without any notice or consent to use, says Acting FTC Chairman Maureen Ohlhause. - This behavior is compounded by software compromising the online protection tools consumers rely on.

As part of the settlement of claims by the FTC, Lenovo agreed to pay a fine of $3.5 million and fulfill several conditions. In particular, the Chinese manufacturer has pledged to obtain user consent to install certain types of advertising software, as well as to launch and maintain a security program for most products preinstalled on released Lenovo laptops in the next 20 years.

Finally, the company promised to bring in independent auditors to monitor the safety of its products.^[14]

Restructuring

On May 16, 2017, Lenovo announced a restructuring involving the company's focus on the Chinese market. Lenovo is carrying out structural reform amid the problems that the vendor is experiencing.

According to The Financial Times, citing a message that Lenovo CEO Yang Yuanqing published on his Weibo page, the company's business will be divided into two divisions: consumer (personal computers and mobile devices) and corporate (the main emphasis will be on business users and the provision of various data management services).

Lenovo announced restructuring

Yang Yuanqing also announced the return to Lenovo of Liu Jun, a respected director at the company who led the acquisition of Motorola Mobility in 2014, after which he left the Chinese manufacturer. Upon his return, Run will lead Lenovo's consumer business in China.

The PC industry is changing, and China has become the fastest changing market for smart devices, says Liu Run. - China is our incubator for new products. In order to take advantage of the new opportunities that are opening up as a result of changes in our market, we are restructuring.

The Financial Times notes that Lenovo is experiencing financial problems: in the fourth quarter of 2016, the company's net profit decreased by 67%. In addition, according to research firm IDC, in the first quarter of 2017, Lenovo lost its status as the largest manufacturer of personal computers in the world for the first time in four years, losing first place to American HP Inc. In this regard, the restructuring is seen as a necessary measure for Lenovo.^[15]

Lenovo eliminates Motorola brand

Lenovo is creating a single brand for all its smartphones. They will be called Lenovo moto, while the manufacturer will remove the Vibe and Motorola brands from the market. About this publication "Vedomosti" executive director of the mobile division of Lenovo in the Eastern Europe region Alexey Klochkov. Read more here.

2016

2% staff reduction

At the end of September 2016, Lenovo reported mass layoffs. Most of the jobs being cut are from smartphone maker Motorola Mobility, which was acquired by the Chinese company in 2014.

According to Lenovo, it is planned to reduce the number of personnel by less than 2%. As of September 2016, the company employs about 55 thousand people, so that as part of the new personnel purge, about 1.1 thousand people will lose their jobs.

Lenovo announced the dismissal of about 1,100 people

Most of the layoffs will affect the telephone division based on Motorola Mobility. Lenovo did not specify how many workers will be removed from this structure. According to the Droid-Life portal, Motorola's staff in the United States has been cut in half.

Lenovo is carrying out a personnel restructuring as part of a strategy to reduce costs, improve efficiency and improve financial results.

The company also makes adjustments to the development of other areas of business, striving to manage costs, increase efficiency and maintain constant growth in financial indicators. While these actions are never easy to take, they are integral to our efforts to drive long-term growth for all of our divisions, Lenovo said.

In its post, Lenovo also denied rumors of the closure and sale of Motorola's headquarters in Chicago.

Chicago enjoys well-deserved recognition for its technical expertise. In this center of our global smartphone research and development, we will use local talent to continue creating Moto-branded products, the Chinese manufacturer said in a statement.

One former Motorola employee cited by Droid-Life claims Lenovo's cuts in the US could be related to moving the business to China.^[16]

Disbanding the Cloud Division

In March 2016, Lenovo announced the disbandment of the cloud division of Ecosystem and Cloud Services (ECS) as part of a large-scale reorganization of the Chinese company.

Instead of ECS, the Capital and Incubator Group structure was created, which focused on investing in startups and creating new companies based on Lenovo employees and technologies. The group is focused on innovative developments in cloud computing and Big Data.

Lenovo dissolves cloud division and reorganizes server division

Cloud services that have developed within ECS are distributed among specialized departments. Former head of ECS George He has been appointed head of Capital and Incubator Group.

Lenovo explained the elimination of the cloud department by the need to "continue differentiating the strategy in the field of devices and clouds."

In addition, the Enterprise Business Group division, which was responsible for servers, storage systems, software and services, has been transformed. It was renamed the Data Center Group (DCG), and its chief executive was Jerry Smith, who began reporting directly to the company's CEO Yang Yuanqing.

The new DCG division will be an even more flexible and disruptive competitor that will accelerate the implementation of an open strategy focused on cooperation with traditional, hyperscale and hyperconverged customers, Lenovo said in a statement.

Earlier in March 2016, it was announced the expansion of Lenovo's computer division (mobile and gaming devices, as well as smart home electronics were added to it) and the dismissal of the head of Motorola Mobility.

Yang Yuanqing commented on this whole reorganization as follows:

Last year (in 2015 - approx. TAdviser) Lenovo showed good results, fast integration of Motorola and System X businesses, and also released several series of innovative products. We must now accelerate our transformation into a customer-centric company. The announced changes will build on these successes, increase the speed of transformation and ultimately help Lenovo enter a new phase of growth.[17]

Expansion of the computer division and dismissal of the head of Motorola Mobility

On March 18, 2016, Lenovo announced a restructuring, in which the computer business was expanded, and the head of the "subsidiary" Motorola Mobility resigned.

According to the updated Lenovo structure, instead of the PC Group division, which oversaw the sale of desktops and laptops, the PC & Smart Device Business structure was created. It will be responsible not only for computers, but also for hybrid gadgets, tablets, large-sized smartphones, gaming equipment and smart home electronics running Windows, Chrome and Android operating systems.

On March 18, 2016, Motorola Mobility CEO Rick Osterlo resigned

The head of the new division has been appointed former CEO of AcerGianfranco Lanci, who will remain in the positions of president and operating director of Lenovo.

PC & Smart Device Business has transferred part of the products for which the Mobile Business Group was previously responsible. It has also undergone restructuring changes.

Rick Osterloh, president of Motorola Mobility, which Lenovo bought in 2014 for $2.9 billion, resigned. The reason for the resignation was not disclosed. Lenovo only reported that Osterlo himself made this decision, and also noted his "invaluable confident leadership" of Motorola Mobility since the takeover of this company Lenovo.

In early 2016, Lenovo announced plans to phase out the Motorola brand. In the smartphone market, the Chinese company decided to focus on branding Vibe and Moto.

Motorola Mobility will continue to exist. Its team, according to a statement from Lenovo on March 18, 2016, will report to Aymar de Lencquesaing, appointed president of Mobile Business Group. Chen Xudong has the same position. Together, they will lead the company's mobile business and report directly to its CEO Yang Yuanqing.

Dynamics of Lenovo's share in the smartphone market

Mobile phone and smartphone sales leaders from 1992 to 2018 in animation below.

2015

IBM Server Business Integration Has Been Lenovo's Headache

On September 10, 2015, Lenovo's top manager spoke about the difficulties of integrating the x86 server business acquired from IBM (the $2.1 billion deal was closed in October 2014) with the main structure of the Chinese company.

be honest, we have some problems internally," said Gerry Smith, COO and Executive Vice President of Lenovo PC and Enterprise Business Group, during a speech at the 2015 Global Technology Distribution Council in San Francisco. "Together with the x86 business, we got a whole culture, and now we spend a huge amount of time reorganizing and retraining."

According to Smith, Lenovo is focused on making mainstream brands out of IBM's acquired server assets, thanks to which all channel partners will be able to conclude profitable deals and make good money on them.

Lenovo COO Jerry Smith spoke about the difficulties of integrating the x86 server business acquired from IBM

When Lenovo acquired IBM's computer business in 2005, the Chinese company spent 18 to 24 months combining different cultures and strategies. In the case of a server deal, the process has been going on for almost a year, and it is planned to complete it faster, said Jerry Smith, adding that the headache for Lenovo is the effective inclusion of personnel transferred from IBM.

The head of the division responsible for PCs and servers also noted that since the acquisition of IBM server assets, he devotes most of his time (80%) to Lenovo corporate products and only 20% to computers, although the Chinese brand is the leader in sales of laptops and desktops in the world, according to the publication of the CRN edition of September 10, 2015.

Jerry Smith admitted that Lenovo has been experiencing a decline in server sales on the x86 processor architecture for three years. By September 2015, the fall stops and recovery is possible in the long term, the top manager said.^[18]

Cutting 3,200 employees or 5% of global workforce

In August 2015, Lenovo announced the reduction of 3,200 employees, that is, about 5% of the global staff. The reason for the reduction was a fall in quarterly income before taxes by 80% and current revenue - by 67%. In an official statement, Lenovo indicated that the wave of cuts will allow the company to save up to $1.35 billion a year on salaries.

Employees who were not working in production should have been reduced. As a result, the company laid off 500 office workers in Chicago, 25% of its workforce in that city. In October 2015, the Chicago office caught up with the next wave of cuts, during which 200 people were laid off.

2014: Buying IBM's x86 server business

Lenovo IBM entered into a final agreement in early 2014 to acquire Lenovo's server business IBM based on the x86 architecture. This direction includes blade servers switchboards and System X, BladeCenter and Flex System, x86-based Flex integrated systems, NeXtScale and iDataPlex servers, related software, and network services and maintenance. The value of the deal was about 2.3 billion. Of dollars USA these, 2 billion will be paid in cash, and the rest - Lenovo shares.

IBM will retain the System z, Power Systems, Storage Systems, Power processor-based Flex servers, and PureApplication and PureData systems.

The agreement relies on many years of cooperation between the two companies, which began back in 2005. Lenovo then acquired IBM's PC business, including its ThinkPad line of computers. Since then, the companies have continued to collaborate in many areas.

IBM will still be developing software for the x86 platform. At the moment, the corporation is a leading developer of software for x86 servers. IBM's portfolio includes thousands of products, and the ecosystem of software developers for x86 server-based systems has tens of thousands of specialists.

Lenovo and IBM also plan to begin strategic collaborations and enter into a global OEM and reseller agreement for sales leaders - IBM Storwize Entry Disk Storage Systems, tape drives, General Parallel File System software, SmartCloud Entry offerings, and certain elements of IBM's software portfolio, including Systems Director and Platform Computing solutions.

After the deal is completed, Lenovo will take over customer service and technical support. IBM will continue to provide technical support on behalf of Lenovo for some time - thus, customers will not notice any changes in the service.

Approximately 7,500 IBM employees working around the world, including key cities such as Raleigh, Shanghai, Shenzhen and Taipei, will be offered employment at Lenovo.

2013

Server Market Attack - VMware Partnership

In July 2013, Lenovo, preparing for another throw at the global server market, announced another partnership with the manufacturer, software this time with the company. VMware The agreement concerns (ON virtualizations vSphere with Operations Management VSOM), which will ship with the ThinkServer server line.

Servers with VSOM are intended for users of medium and small businesses, said Lenovo manager Sian Gilbert. Lenovo has been developing its server line for several years now, but has so far sold only hardware in its pure form, while major competitors, including HP, Dell and IBM, are implementing comprehensive solutions equipped with the necessary software.

Lenovo, which does not deal with software in its "pure form," is increasing its competence in this area and the corresponding product line by expanding partnerships with other companies. In addition to VMware, it also works Microsoft with virtualization software. In addition, servers Lenovo is certified to work with virtualization software from, Citrix although it is with this company that a cooperation agreement has not yet been officially concluded.

In the x86 server segment, where Lenovo's main interest is concentrated, virtualization is almost the key technology that drives the market, said Charles King, an analyst at Pund-IT. "Now is a good time for them to perform," he believes.

According to Gilbert, Lenovo intends to develop partnerships with other software manufacturers as well. He also added that the company would like to be an open player, leaving buyers with the right to choose. "We have no plans to immediately become a software company," a Lenovo spokesman summed up.

Software servers are sold by a separate division of the company, Enterprise Product Group, which was formed in November 2012. Lenovo also strengthened its position in the storage market through a partnership with the EMC vendor, which resulted in the creation of a separate company called LenovoEMC.

British intelligence agencies banned Lenovo computers

British intelligence agencies, including the MI5 internal security service and the MI6 foreign intelligence service, have abandoned the use of Lenovo products, the Australian edition of the Financial Review reported in July 2013.^[19]

In addition to the UK, a written ban on the use of Lenovo products has been introduced in the intelligence services of the United States, Canada, New Zealand and Australia - all of these countries are members of the Five Eyes alliance, created to cooperate in the field of intelligence. A spokesperson for the Australian Department of Defence confirmed Lenovo's products had never been authorized for use by secret units.

The ban was introduced after extensive tests, according to which the services concluded that Lenovo computers are unsafe for the reason that they contain hardware backdoors and firmware vulnerabilities that allow you to gain remote control over the system without the user's knowledge.

The explanation of the ban also includes the following expression: that the software installed on Lenovo computers is produced by companies with close ties to the Chinese government - therefore, the use of such software by other countries may pose a threat to national security.

Manufacturer No. 1 in the personal computer market

Lenovo is the world's largest manufacturer of personal computers. According to Gartner, in the second quarter of 2013, the vendor delivered 12.7 million personal computers, taking first place with a share of the 16.7% global market.

2012

New goals - smartphones and tablets

At a ceremony in Beijing to mark the beginning of fiscal year 2012 (kicks off April 1), Yang Yuanqing, President and CEO of Lenovo, said that his company has set a goal to come out on top in terms of PC production.

have never been so close to the position of the leader," he said.

According to the report published on the same day, in the Gartner first quarter of calendar 2012, the first place was taken HP with the volume of deliveries of 15,305,413 PCs and a share of 17.2%. Lenovo lagged behind the leader by only 4% - its share was 13.1%. In addition, the company demonstrated the highest growth rate among the five largest collectors, supply volumes increased by 28.1%. Lenovo has been equally successful in mastering the corporate and consumer segments.

The expansion of the global presence has a downside. As you know, the PC market has a low profit rate - in the last financial year for Lenovo, it did not exceed 1.8%. Will it not turn out that in order to maintain further growth in the market share, the company will have to be content with even smaller margins? Answering this question, Chen Xudong, senior vice president of Lenovo Group and president of Lenovo in the Chinese region, drew attention to the need for a gradual migration of business from a highly competitive "red ocean" to a "blue ocean" filled with unique solutions. The company intends to reorient part of the business towards the production of smart TVs and smartphones.

According to Yang Janking, Lenovo is currently one of the three largest smartphone manufacturers in the Chinese market. In the third quarter of 2011, they held double-digit market share at a cost of $159. In fiscal 2012, the company will introduce 40 new mobile phone models and begin expanding into markets in other countries.

Lenovo also has good prospects in the tablet segment. The third generation models are only 8.7 mm thick, weigh 580 g and are capable of working up to 20 hours in standby mode (with power supplied to the peripheral circuits). Since the company is an exclusive partner of Intel and Microsoft, it will be the first to introduce a Windows 8 tablet in October.

Manufacturer of PC No. 2 in the world

From the preliminary IDC report, it follows that in the first quarter of 2012, Lenovo, having produced 11.703 million computers, became the second largest PC manufacturer in the world (with a market share of 13.4%), losing only HP (18%) in this indicator and beating Dell (11.6%), Acer (9.9%) and Asus (6%). According to the results of the Q1/2011, Lenovo was only fourth in the world "table of ranks" of PC manufacturers (with an indicator of 9.6%), behind HP, Dell and Acer.

Annual sales reached a record value of $34 billion, an increase of 15% year-on-year. The maximum value in history also reached profit - $635 million. Compared to the 2012 financial year, profit increased by 34%.

Lenovo's results are ahead of the industry at the end of the year. Shipments of Lenovo computers in the 2012-2013 fiscal year increased by 10.2%, while total global shipments decreased by 8.1%, according to the vendor's own estimate. The growth rate for the year was higher than any of the manufacturers.

The largest market share belongs to Lenovo in its native China - 31.7%. The share in North America is 9.3%, and in the EMEA region - 11.8%.

Opening Lenovo Enterprise App Shop

On March 27, 2012, Lenovo announced the opening of the first business app store, the Enterprise App Shop. On the one hand, it enables companies to self-publish ON and define pricing policies, on the other hand, provides corporate users with access to a pool of tablet programs running OS Android versions 3.1 and higher.

The growing penetration of personal mobile devices into the corporate environment is forcing companies to seriously think about which third-party applications their employees use, said Mark Cohen, vice president of ecosystem monetization at Lenovo. According to him, the created store provides for integration with LDAP and is designed to solve the problem of managing the fleet of software used on tablets. This approach will win both IT managers and the users themselves, who will have at their disposal a verified set of optimized and proven applications.

Lenovo App Shop Manager allows companies to create their own customized app stores for their employees, and thereby simultaneously solve management and security issues. In this case, the purchase, licensing and distribution of software to corporate users falls on the shoulders of IT managers, in fact, as it should be. In addition, App Shop Manager is a cloud Solution SaaS with all the ensuing advantages, primarily low cost of ownership.

Enterprise App Shop is available in all regions of the world except China. The company does not comment on what explains such selectivity. Lenovo claims that all apps from the App Shop Catalog do not contain malicious code and are tested for compatibility with its tablets. You can select individual items in the catalog and thus form your own company using the App Shop Manager. Users also gain access to the MobiHand Universal Android directory, however, exclusively approved enterprise applications will be available for download and purchase.

2011: IBM sells its stake in Lenovo Group for $265m

In February 2011, it became known that IBM sold its stake in Lenovo Group, withdrawing $265 million. The company sold a total of 435 million 720 thousand shares of Lenovo at a price of 4.68 Hong Kong dollars/share (0.6 dollars) to 4.71 Hong Kong dollars/share (0.604 dollars). Thus, the discount on the company's securities amounted to 4.1%.

2010: 19K employees

Lenovo Group's net profit in the third quarter of the 2010-2011 financial year (ended December 31, 2010) amounted to $ 99.7 million. The total number of employees of the company exceeds 19 thousand people.

2005: Investment of US funds to buy IBM's computer business by the company

In 2005, General Atlantic, together with Texas Pacific Group and Newbridge Capital, invested $350 million in the Chinese PC manufacturer Lenovo. Some of this money went to buy a computer business from IBM.

Notes