Lenovo
The rise of the frugal innovator
Having conquered the global market for personal computers, China’s
Lenovo is setting its sights higher
May 24th 2014 | HONG KONG | From the print edition
“LENOVO is the best company in the world at balancing innovation and efficiency.”
So declares Yang Yuanqing, the chairman of the Chinese computer-maker. The
boast is at least half right. The firm has certainly displayed its ruthless efficiency of
late, by keeping costs down and grabbing market share from its big Western rivals.
Lenovo has recently bested HP to become the top peddler of desktop computers
worldwide. From a negligible share a few years ago, it is rising fast in the global
smartphone market too.
It has managed this expansion while remaining in rude financial health. On May
21st Lenovo announced its full-year results (its fiscal year runs to the end of March)
in Hong Kong, where it has been listed since 1994. Its revenues were 14% higher
than in the previous year, at $38.7 billion. For the first time, pre-tax profits topped
$1 billion, rising by 27% on a year earlier. The firm had a cash pile of $3.5 billion at
the end of March—and at the end of April it raised another $1.5 billion in its first
bond offering.