UPDATED 07:30 EDT / JUNE 07 2013


Lenovo Chief Targets Push in Servers, Storage and Smartphones

The world’s second biggest PC maker Lenovo is setting its sights on the server, storage and smartphone business as it looks to expand its horizons in the post-PC era.

In an interview with the Wall Street Journal on Thursday, Lenovo’s CEO Yang Yuanqing revealed that storage and server were a critical area of expansion for the company. To that end, he said that if acquisition opportunities emerge, the company will look to capitalize on them to further its goals.

Lenovo’s chief added that he believes there’s still a great opportunity in the PC market itself, in spite of the ominous predictions from several analysts and research firms in recent months. The most recent figures for IDC showed that global PC shipments in the first quarter plunged by 14%, the steepest market decline since 1994.

This slump has caused quite a bit of panic among PC makers, most notably with Dell and Hewlett-Packard, both of whom have made moves into enterprise storage and software solutions to accommodate this decline. Things aren’t quite so bad for Lenovo and Apple, which are still seeing slight growth in their own PC sales. However, if Lenovo is to continue growing as a company, Yang believes that its necessary to branch out and evolve, rather than just discard the PC business altogether.

“The PC will not die, but the future PC is not the past PC” stated Yang in the interview.

Lenovo has already made some moves with regards to its storage solutions. Just last month, the company announced the availability of its LenovoEMC portfolio of Network Attached Storage products in the US. As SiliconANGLE’s senior managing editor Kristen Nicole said at the time, “Lenovo’s one of the few companies managing both enterprise and consumer spaces relatively successfully – Lenovo’s global model is what HP and Dell are trying to follow.”

Lenovo seems incredibly confident of itself these days. Despite the breakdown of talks between it and IBM over the sale of the latter’s x86 server business, it’s ambitions haven’t been deterred. At the same time, the company has aggressively been seeking out a new mobile division, and has shown an interest in acquiring both NEC and Blackberry in recent months – and while nothing has materialized yet, such a move could happen a lot sooner than we think now that Lenovo’s smartphones are about to hit the US market.

When asked about smartphones, Yang said that the bigger opportunity lies in developing markets. He said that the company plans to expand away from China to other emerging markets at the same time as it tries its luck in countries like the US. Within a year, he hopes that Lenovo smartphones will be established in the latter.

“Gross margin for smartphones is better than PCs,” admitted Yang. To target these better margins, Lenovo has switched its focus onto research and development, whilst branding remains important as it tries to establish a loyal base of customers.

When questioned about China, Yang acknowledged that the company’s home market was still hugely important.

“I believe the export and investment growth engine has reached its limit. The potential is in domestic consumption, moving away from manufacturing to innovation.”

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