Lenovo in major reshuffle, founder back in charge

By Wang Xing (China Daily)
Updated: 2009-02-06 07:46

Chinese computer maker Lenovo Group, the fourth largest in the world, Thursday announced its most drastic personnel and strategic changes in the last three years amid the worldwide economic crisis and declining sales.

Change No 1: Liu Chuanzhi, the 65-year-old founding chairman, will return to his old post.

In 2005, Liu handed over his job as Lenovo chairman to Yang Yuanqing but still kept the position as vice-chairman of Legend Holdings, Lenovo's parent company.

Change No 2: A shift in sales strategy to the domestic market.

Change No 3: A stronger focus on the consumer, rather than corporate, market.

Change No 4: Yang becomes president and chief executive, replacing Bill Amelio, a former Dell executive whose contract with Lenovo has expired.

Liu started Lenovo's predecessor company 25 years ago and was Lenovo's chairman until 2005, when the company acquired IBM's PC division.

In the following three years, the company has been remolding itself into an international company and trying hard to expand outside China.

Liu said in a statement issued Thursday: "Lenovo has grown successfully on the international stage, but at this important time, we want to pay particular attention to our China business as it represents the foundation of our global business and growth strategy."

He denied that Lenovo would give up on mature markets abroad.

The Lenovo announcement came the same day it posted a net loss of $96.7 million for the third quarter ending December, the first since 2005.

The company's PC shipments in the quarter shrank 5 percent year on year due to a continued decrease in worldwide demand as well as a slump in the Chinese market, according to the company.

Yang said Thursday that the China business will make up a bigger share in the company's total revenue in the short term and that Lenovo would continue to expand in the consumer market.

As Lenovo's largest market, the Chinese mainland contributed 45 percent of total revenue. Although shipments in the mainland declined 1 percent in the third quarter due to the economic slowdown, its overall market share in the region grew 1.8 percentage points to 30.5 percent.

That presents a sharp contrast to Lenovo's major oversea markets.

According to research firm IDC, Lenovo's share in the global PC market dropped from 8.2 percent in 2007 to 7.7 percent in the third quarter.