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Lenovo, the world's third-largest personal computer (PC) maker, yesterday appointed a new president and chief executive officer to lead its business into "profit-making growth" as the company speeds up its consolidation with IBM's PC operations.
William Amelio, Dell's former senior vice-president for Asia Pacific and Japan, was appointed by Lenovo's board as the new company leader. His predecessor Steve Ward will work as adviser for a period of time to ensure smooth transition.
"The board's decision for a new CEO is fully based on the company's development strategy in the next stage, and Ward has agreed with the board in doing so," Lenovo Chairman Yang Yuanqing said in a telephone conference yesterday.
Lenovo is already ahead of schedule in its three-stage plan to consolidate with IBM's PC business. The first stage, which was expected to end this month at the earliest, was completed in October.
Last December, Lenovo acquired IBM's PC business for US$12.5 billion.
During the first stage, the company's international PC business has walked off losses and already started generating profits, he said.
Lenovo posted a 22-percent jump in earnings in the July-September quarter, with quarterly revenue up 404 percent year-on-year to US$3.6 billion.
The company is showing signs of achieving its potential, said Yang. Thanks in part to Ward's contribution, Yang said the two separate businesses are integrating successfully into one.
"Now we are entering the second phase, which requires us to achieve profit-making growth," he noted. "It is the right time to take such move."
Amelio will be a "competent leader of Lenovo in the next stage" as he has rich experience in PC industry and is familiar with Asian markets, said Yang.
Before working for Dell, Amelio had a 18-year experience at IBM, where he was responsible for PC operations.
Amelia said Lenovo has "a great foundation of growth strategy forward," adding he was proud to be part of the "ground-breaking" company.
Yang told China Daily that he expects to see "a growth rate (in terms of revenue) doubling the industry average" and to regain overall profitability before the deal ends.
Lenovo pins high hopes on fast-growing small and medium-businesses (SMBs) worldwide, and Yang is confident of growth.
The PC maker, which is seeking new opportunities in emerging markets such as India, Brazil and Mexico, has been striving to tap the overseas market. Its purchase of IBM's PC business was reportedly an attempt to explore international markets.
Although Amelio brings in experience from Dell, it looks unlikely that Dell's direct-marketing business model will be introduced at Lenovo. Yang said Lenovo's existing business model is proven "quite successful."
"Our guideline is to create the maximum value for our customers," he said. "In China we will stick to our own business models."
Investors and industrial analysts widely acknowledge that, since the acquisition, Lenovo's performance in the PC industry is better than previously anticipated.
Lenovo commanded 7.7 percent in the global PC market during the third quarter, down from the 8 percent in the second quarter.
Its rivals, Dell and Hewlett-Packard, held 18 percent and 16 percent respectively, with slight increase, according to global market firm IDC.
In Asia-Pacific, where Lenovo ranks No. 1, its market share during July and September increased to 20.1 percent, from the 18.5 percent during the previous quarter.
(China Daily December 22, 2005)
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