Wednesday, February 23, 2011
Lenovo chairman talks economics, future of PCs
Chuanzhi helped found Lenovo in 1984 with a group of 10 engineers in China at a time when the country was in transition. Moving from a planned economy to a market economy was hard enough, but Chuanzhi and colleagues also had to compete with Western companies attempting to insert themselves in the Chinese marketplace. After purchasing IBM's PC business in 2004, Lenovo has today grown to the fourth-largest provider of PCs in the world, behind Hewlett-Packard, Dell, and Acer.
As chairman of Lenovo, Chuanzhi doesn't come to the U.S. often. But during a rare trip to San Francisco late last week, CNET got the chance to sit down with him. We spoke shortly after his company delivered a promising earnings report, but the topics ranged from Lenovo's efforts to grow its brand outside of China, to what happens to the personal computer in the "post-PC era."
Here's an edited portion of our interview (we spoke through an interpreter).
On why Lenovo keeps outgrowing the PC market overall:
"At the outbreak of the financial crisis, Lenovo's main sales and profits were all based in China, so when the Chinese economy took a downturn, Lenovo's performance took a very big hit. Over the last couple years a lot of attention has been paid to achieving more balanced growth, geographical balance both inside and outside of China, also (balance between) sales to enterprise versus sales to consumers. That's why we've been able to maintain very steady growth.
"Deciding on this correct strategy was not a fluke--it was the result of senior management having repeated discussions and analysis of what the trends would be."
Why the "post-PC era" is a good thing in the long run:
"Several years ago Lenovo realized that mobile broadband was on the horizon and we were working on integrating that into PCs. Then last year we introduced the LePhone (smartphone) and we're about to introduce tablets. We brought out a product at CES, the U1, that you put your slate into the laptop, that was quite favorably received at CES.
"We find it rather exciting in this new era we're going into that it marks the end of the 'Wintel' monopoly. It offers more room for innovation and choice of OS and CPUs. I think there will be more types of platforms. Right now, I think (the combination of Windows and Intel chips are) still the best choice for enterprise machines, but I think gradually the distinctions between consumer and enterprise machines will also change."
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