Lenovo

Lenovo is a big technology company from China that makes many kinds of electronic products. It started as a small part of a research group and grew into one of the world's biggest makers of personal computers. Lenovo makes computers for people to use at home or work, like laptops and desktops. They also make tablets, smart TVs, and even smartphones under the name Motorola.

In 2005, Lenovo bought the computer part of IBM, which included the popular ThinkPad laptops. This helped Lenovo grow very fast and become the biggest computer seller in the world by 2013. Today, Lenovo makes many different products for people all around the globe, from everyday home computers to powerful machines for businesses and scientists.

Etymology

The name "Lenovo" comes from mixing parts of two words: "Le-" from "Legend" and "novo", a Latin word meaning "new". In Chinese, the company's name 联想 (Liánxiǎng) means "association" or "connected thinking", and it also suggests creativity. The word "Lianxiang" was originally used to describe a special layout for Chinese typewriters in the 1950s.

For the first 20 years, the company used the name "Legend" in English. But in 2002, the leader of the company decided to change it because "Legend" was already used by many other businesses around the world. In April 2003, they announced the new name, "Lenovo", with big advertisements and TV commercials. They spent a lot of money to share their new name with everyone.

History

1984–1993: Founding and early history

Lenovo started in Beijing on November 1, 1984, as Legend, created by a team of engineers led by Liu Chuanzhi and Danny Lui. At first, the company made televisions but later shifted to making and selling computers.

Liu Chuanzhi and ten other engineers, along with Danny Lui, officially started Lenovo in Beijing on November 1, 1984, with 200,000 yuan. The Chinese government approved Lenovo’s creation the same day. Eleven people made up the first staff, all from the Institute of Computing Technology at the Chinese Academy of Sciences. The 200,000 yuan for starting the company was approved by Zeng Maochao. The name “Legend” was chosen at the first meeting on October 17, 1984.

The company’s organization was set up in 1985 after the Chinese New Year, with departments for technology, engineering, administration, and offices. Lenovo first tried to import televisions but failed, so it changed to checking the quality of computers. They also tried selling a digital watch but did not succeed.

In May 1988, Lenovo placed its first job ad in the China Youth News newspaper. Out of 500 people who applied, 280 took a test, and 120 were interviewed. Though only 16 were supposed to be hired, 58 got job offers. This group included 18 with graduate degrees, 37 with undergraduate degrees, and three with no university education. Yang Yuanqing, now Lenovo’s chairman and CEO, was part of this group.

Liu Chuanzhi got permission to start a subsidiary in Hong Kong and moved there with five other employees. With help from his father, who was already in Hong Kong, Liu secured loans and support. Liu and his team walked instead of using public transport to save money and rented hotel rooms for meetings.

In 1990, Lenovo began making and selling computers under its own brand name. Early successes included the KT8920 mainframe computer and a circuit board that let IBM-compatible computers process Chinese characters.

1994–1998: IPO, second offerings and bond sales

Lenovo, known then as Legend, became a public company in 1994 after a Hong Kong IPO that raised nearly US$30 million. On the first day of trading, the stock price reached HK$2.07 and closed at HK$2.00, showing the company was undervalued. Money from the IPO was used to open sales offices in Europe, North America, and Australia, improve production and research, and increase working capital.

By 1996, Lenovo was the leader in China and started selling its own laptop. By 1998, it had 43% of China’s computer market, selling about one million computers.

Lenovo launched the Tianxi computer in 1998. It was designed to help new Chinese users easily use computers and access the internet, with a special button to connect to the internet and open a web browser. Made with China Telecom, it came with one year of internet service. The Tianxi became the best-selling computer in Chinese history, selling over 1,000,000 units in 2000 alone.

1999–2010: Merger with the IBM Personal Systems Group and sale of smartphone division

Lenovo raised about US$212 million in March 2000 by selling 50 million shares in Hong Kong and changed its name to Lenovo in 2003. It grew by buying other companies.

In 2005, Lenovo merged with IBM’s personal computer business, which made the ThinkPad laptop and ThinkCentre desktops. Lenovo paid US$1.25 billion for IBM’s computer business and took on an extra US$500 million of IBM’s debt. This made Lenovo the third-largest computer maker in the world. Lenovo also got IBM’s technology and global sales channels.

Despite buying the “Think” brand from IBM, IBM still helps with servicing and repairing Think products and acts as an authorized seller of refurbished Think products.

IBM also bought an 18.9% share in Lenovo in 2005 but sold it all by 2011.

Lenovo’s chief financial officer from 1990 to 2007, Mary Ma, helped the company follow international accounting rules and improve its reputation for good management. Lenovo started holding investor meetings and created committees with outside directors.

Lenovo sold its smartphone and tablet division in 2008 for US$100 million to focus on personal computers but bought it back in 2009 for US$200 million. By 2009, the mobile division was third in China’s phone market. Lenovo spent CN¥100 million to support new app development for its LeGarden app store, which had over 1,000 apps and thousands of developers by 2010.

2011–2013: Re-entering smartphone market and other ventures

In January 2011, Lenovo joined with Japan’s NEC to make personal computers together, forming Lenovo NEC Holdings in the Netherlands. NEC got US$175 million in Lenovo stock, and Lenovo owned 51% of the new company.

This partnership aimed to grow Lenovo’s sales in Japan, a key market where NEC had 20% of the computer market and Lenovo had 5%. They also planned to work together on servers and tablets.

In June 2011, Lenovo planned to buy Medion, a German electronics company, to double its share of the German market. The deal closed later that year, making Lenovo the third-largest computer seller in Germany. Lenovo paid cash for most of Medion but also gave stock for part of the purchase. By 2025, Lenovo fully owned Medion.

In September 2012, Lenovo agreed to buy Brazil’s Digibras, which sold products under the CCE brand, for R$300 million (US$148 million). An extra R$400 million depended on the company’s performance. Lenovo already had a $30 million factory in Brazil but wanted a local partner to grow more. Lenovo wanted to benefit from events like the 2014 World Cup and 2016 Olympics in Brazil and liked CCE’s quality.

Lenovo also bought Stoneware, a US software company, in September 2012 to improve its cloud-computing services. Stoneware had worked with Lenovo for two years before being bought. Stoneware, based in Indiana, had 67 employees.

Lenovo entered the smartphone market again in 2012 and quickly became the biggest smartphone seller in mainland China. This change was because of Apple’s iPhone and Lenovo’s wish to grow its market share. Lenovo passed Apple to become the number two smartphone seller in China in 2012, though with only 10.4% of the market.

In May 2012, Lenovo invested US$793 million to build a phone factory and research center in Wuhan, Hubei.

In 2013, Lenovo joined with EMC to take over Iomega. The new company used the LenovoEMC brand for products aimed at small and medium businesses that couldn’t afford big company storage solutions. Lenovo later stopped selling all LenovoEMC products.

Since 2014: Purchase of IBM server lines and other acquisitions

IBM sold its x86 server lines, including System x and Blade Center, to Lenovo in 2014. Lenovo said this would help it reach more business customers, improve profits, and work closer with Intel, the main maker of server processors. Lenovo finished buying IBM’s server business on October 1, 2014, for $2.1 billion, less than the $2.3 billion first announced because of changes in IBM’s inventory value. The deal needed approval from the US government.

After the purchase, Lenovo aimed to become the world’s biggest server maker. It planned to keep all 6,500 new employees and protect jobs in research and customer roles like marketing. Some supply chain and procurement jobs might change.

On January 29, 2014, Google agreed to sell Motorola Mobility to Lenovo for US$2.91 billion. By February 2014, Google owned about 5.94% of Lenovo’s stock. The deal included smartphone brands like Moto X, Moto G, and Droid Turbo, plus future Motorola plans, while Google kept most patents and its advanced technology unit. Lenovo got free use of the kept patents. The European Union approved the sale in June 2014, and it finished on October 30, 2014. Motorola stayed based in Chicago and kept the Motorola brand, but Liu Jun, Lenovo’s mobile device president, took charge.

In April 2014, Lenovo bought patents from NEC related to mobile technology, including over 3,800 patent families worldwide for 3G and LTE cellular technology and other smartphone and tablet patents.

In May 2015, Lenovo showed a new logo at Lenovo Tech World in Beijing with the slogan “Innovation Never Stands Still.” The new logo, made by Saatchi, could change shape for different uses while keeping a lounging “e” inside a box.

In June 2015, Lenovo planned to sell up to US$650 million in five-year bonds in Chinese yuan. The bonds were sold in Hong Kong with interest rates from 4.95% to 5.05%. This was only the second time Lenovo sold bonds. Experts said Lenovo paid more to use yuan because borrowing in US dollars was cheaper.

Lenovo said its x86 servers would be sold to all its partners. Lenovo planned to lower prices on x86 products to gain market share, matching IBM’s focus on cloud technologies and its own POWER processor design.

In March 2017, Lenovo joined with DataCore, a Florida software company, to add DataCore’s parallel I/O software to Lenovo’s storage devices. The servers were said to work better than Storage Area Network (SAN) systems.

In 2017, Lenovo created a joint venture with Fujitsu and Japan’s Development Bank to buy a 51% stake in Fujitsu Client Computing Limited. Japan’s Development Bank would buy a 5% stake.

In September 2018, Lenovo and NetApp announced a partnership and joint venture in China. Lenovo started two new storage systems, DM-Series and DE-Series, using Lenovo hardware with NetApp software: DM-Series with ONTAP OS and DE-Series with SANtricity OS.

In 2018, Lenovo became the world’s largest provider of TOP500 supercomputers.

In 2020, Lenovo became a preferred partner for DreamWorks Animation for data centers, starting with Trolls World Tour. It later became the studio’s main workstation partner in 2021 for The Bad Guys.

On January 12, 2021, Lenovo applied to list Chinese depositary receipts for new shares on the Science and Technology Innovation Board of the Shanghai Stock Exchange.

In April 2021, Lenovo reorganized into three groups: the Intelligent Devices Group for PCs, smartphones, smart collaboration tools, augmented and virtual reality, and internet of things devices; the Infrastructure Solutions Group for smart infrastructure; and the Solutions and Services Group for services and industry-specific products. That year, the company reached $60 billion in yearly revenue.

On October 8, 2021, Lenovo withdrew its application to list on the Shanghai Stock Exchange just days after it was accepted, saying financial information in its prospectus might become outdated. The company’s shares on the Hong Kong Stock Exchange fell over 17%, its biggest drop in over a decade.

Products and services

Lenovo makes personal computers, smartphones, televisions, and wearable devices. Some of its earliest products were a mainframe computer and a circuit board that helped IBM-compatible computers show Chinese characters. One of its first computers, the Tianxi, came out in 1998 and became very popular in China.

Lenovo sells many types of laptops and desktops, such as the ThinkPad, IdeaPad, Yoga, Legion, and Xiaoxin lines, as well as IdeaCentre and ThinkCentre desktops. In 2005, Lenovo bought IBM’s personal computer business, which included the ThinkPad and ThinkCentre brands. Since then, Lenovo has grown the Think brand to include tablets and hybrid devices. This expansion helped Lenovo succeed, and by 2013, it controlled over 40% of the market for Windows computers priced above $900 in the United States.

The ThinkPad laptops are known for their boxy black design, inspired by traditional Japanese bentos. Originally made by IBM, ThinkPads are now developed and sold by Lenovo. They have been used in space and were the only laptop certified for use on the International Space Station until 2016.

The ThinkCentre desktops, also originally from IBM, are now made and sold by Lenovo. They include powerful processors and options for multiple monitors. There have also been more affordable versions, known as “thin clients,” which connect to a central server instead of working alone.

Lenovo also offers servers under the ThinkServer and ThinkSystem names, workstations called ThinkStations, and high-end monitors named ThinkVision. The IdeaPad line, introduced in 2008, focuses on consumer laptops with a design different from the business-oriented ThinkPad. IdeaCentre desktops combine the computer and monitor in one unit and were first introduced in 2008.

Lenovo’s Legion series targets gaming performance, with models like the Y520, Y720, and Y920 introduced between 2017 and 2018. In 2020, Lenovo expanded the Legion line with models 3, 5, and 7, and in 2021 launched the Legion 5 Pro. In 2023, Lenovo introduced the LOQ brand for budget and new gamers.

Lenovo makes smartphones using the Android operating system. The company has aimed to become a top smartphone seller, especially in China, and has invested heavily in production and sales channels. In 2014, Lenovo acquired Motorola Mobility, which helped boost its smartphone plans in the U.S. market. Despite challenges, Lenovo continues to develop and market smartphones globally.

Lenovo has also entered the smart television market with its LeTV brand and has developed wearable devices, such as a Smartband with features like heart-rate monitoring and call notifications. In 2015, Lenovo partnered to enter the smart home market, launching home automation products at IFA 2018. In 2016, Lenovo introduced Lenovo Connect, a wireless roaming service for use across devices and borders.

Operations

Lenovo operates in over 60 countries and sells its products in around 180 countries. The company's main facilities are in Beijing, Singapore, and Morrisville, North Carolina, United States, with research centers in several cities including Beijing, Singapore, Morrisville, Shanghai, Shenzhen, Xiamen, Chengdu, Nanjing, Wuhan, and Yamato in Japan. In February 2013, a large global store opened in Beijing.

Lenovo prefers to make many of its products itself instead of hiring other companies to do it. This helps the company keep costs down and respond quickly to changes in technology and customer demand. After floods in Thailand affected other hard-drive makers in 2011, Lenovo was able to keep making products because of its own manufacturing. The company decided to increase its own production after analyzing costs and benefits in 2009. By 2013, Lenovo was ranked 20th on a list of the best supply chains.

In 2012, Lenovo began making some of its ThinkPad computers in Japan, and in October 2012, it started assembling computers in Whitsett, North Carolina. Production began in January 2013. In 2015, Lenovo planned to build a research center in Hong Kong and also start making computers in Pondicherry, India.

Corporate affairs

Business trends

The key trends for Lenovo are (as of the financial year ending March 31):

Headquarters

Alongside Beijing, the company has operational centres in Lorong Chuan, Singapore, and Morrisville, North Carolina (near Raleigh in the Research Triangle metropolitan area) in the United States. As of October 2012, the Morrisville facility has about 2,000 employees. Lenovo identifies its facilities in Beijing, Singapore, and Morrisville as its "key location addresses", where its principal operations occur. The company's registered office is on the 23rd floor of the Lincoln House building of the Taikoo Place in Quarry Bay, Hong Kong.

Previously the company's U.S. headquarters were in Purchase, Harrison, New York. About 70 people worked there. In 2006, Lenovo announced that it was consolidating its U.S. headquarters, a logistics facility in Boulder, Colorado, and a call center in Atlanta, to a new facility in Morrisville. The company received offers of over $11 million in incentive funds from the local Morrisville, North Carolina, area and from the State of North Carolina on the condition that the company employs about 2,200 people. In early 2016, Lenovo carried out a comprehensive restructuring of its business units.

Financials and market share

In the third quarter of 2020, Lenovo commands a leading market share of 25.7 percent of all PCs sold in the world.

In March 2013, Lenovo was included as a constituent stock in the Hang Seng Index. Lenovo replaced the unprofitable Aluminum Corporation of China Limited, a state-owned enterprise, on the list of 50 key companies on the Hong Kong stock exchange that constitute the Hang Seng Index. The inclusion of Lenovo and Tencent, China's largest internet firm, significantly increased the weight of the technology sector on the index. Being added to the Hang Seng Index was a significant boon for Lenovo and its shareholders as it widened the pool of investors willing to purchase Lenovo's stock. For instance, index funds pegged to the Hang Seng and pension funds that consider index inclusion now have the opportunity to invest in Lenovo. In November 2013 Lenovo reported that it had achieved double-digit market share in the United States for the first time.

Ownership

In 2009, China Oceanwide Holdings Group, a private Investment company based in Beijing, bought 29% of Legend Holdings, the parent company of Lenovo, for ¥2.76 billion. As of 31 March 2018^[update], 65% of Lenovo stock was held by the general public, 29% by Legend Holdings, 5.8% by Yang Yuanqing, and 0.2% by other directors.

Responding to claims that Lenovo is a state-owned enterprise, CEO Yang Yuanqing said, "Our company is a 100% market oriented company. Some people have said we are a state-owned enterprise. It's 100% not true. In 1984 the Chinese Academy of Sciences only invested $25,000 in our company. The purpose of the Chinese Academy of Sciences to invest in this company was that it wanted to commercialize its research results. The Chinese Academy of Sciences is a pure research entity in China, owned by the government. From this point, you could say we're different from state-owned enterprises. Secondly, after this investment, this company is run totally by the founders and management team. The government has never been involved in our daily operation, in important decisions, strategic direction, nomination of the CEO and top executives and financial management. Everything is done by our management team."

As of 2014, the Chinese Academy of Sciences, owns 11.7% of Lenovo and IBM owns 37.8%.

In early 2006, the U.S. State Department was criticized for purchasing 16,000 computers from Lenovo. Critics argued that Lenovo was controlled by the Chinese government. Yang spoke out forcefully and publicly to defend Lenovo. He said, "We are not a government-controlled company." He pointed out that Lenovo pioneered China's transition to a market economy and that in the early 1990s had fought and beaten four state-owned enterprises that dominated the Chinese computer market. Those firms had the full backing of the state while Lenovo received no special treatment. The State Department deal went through. Yang worried that fears about Lenovo's supposed connections to the Chinese government would be an ongoing issue in the United States. Yang worked to ease worries by communicating directly with Congress.

Yang dramatically increased his ownership stake by acquiring 797 million shares in 2011. As of June 2011, Yang owned an 8 per cent stake in Lenovo. He previously owned only 70 million shares. In a statement, Yang said, "While the transaction is a personal financial matter, I want to be very clear that my decision to make this investment is based on my strong belief in the company's very bright future. Our culture is built on commitment and ownership – we do what we say, and we own what we do. My decision to increase my holdings represents my steadfast belief in these principles."

Corporate culture

Lenovo's senior executives rotate between the three head offices at Beijing, Singapore, and Morrisville, as well as Lenovo's research and development center in Yamato, Japan.

Leadership

Yang Yuanqing

Main article: Yang Yuanqing

Yang Yuanqing is the chairman and chief executive officer of Lenovo. One of his major achievements was leading Lenovo to become the best-selling personal computer brand in China since 1997. In 2001, Bloomberg Businessweek named him one of Asia's rising stars in business. Yang was president and CEO of Lenovo until 2004, when Lenovo closed its acquisition of IBM's PC division, after which Yang was succeeded as Lenovo CEO by IBM's Stephen M. Ward Jr. Ward was succeeded by William Amelio on 20 December 2005. In February 2009, Yang replaced Amelio as CEO and has served in that capacity ever since. Yang was chairman of Lenovo's board from 2004 to 2008, and returned as chairman in 2012 alongside his role as CEO.

In 2012, Yang received a $3 million bonus as a reward for record profits, which he in turn redistributed to about 10,000 of Lenovo's employees. According to Lenovo spokesman, Jeffrey Shafer, Yang felt that it would be the right thing to, "redirect [the money] to the employees as a real tangible gesture for what they done." Shafer also said that Yang, who owns about eight per cent of Lenovo's stock, "felt that he was rewarded well simply as the owner of the company". The bonuses were mostly distributed among staff working in positions such as production and reception who received an average of CN¥2,000 or about US$314. This was almost equivalent to a monthly salary of an average worker in China. Yang made a similar gift of US$3.25 million again in 2013.

According to Lenovo's annual report, Yang earned US$14 million, including US$5.2 million in bonuses, during the fiscal year that ended in March 2012.

In 2013, Barron's named Yang one of the "World's Best CEOs".

Liu Chuanzhi

Main article: Liu Chuanzhi

Liu Chuanzhi is the founder and former chairman of Lenovo. Liu was trained as an engineer at a military college and later went on to work at the Chinese Academy of Sciences. Like many young people during the Cultural Revolution, Liu was denounced and sent to the countryside where he worked as a laborer on a rice farm. Liu claims Hewlett-Packard as a key source of inspiration. In an interview with The Economist he stated that "Our earliest and best teacher was Hewlett-Packard." For more than ten years, Lenovo was Hewlett-Packard's distributor in China. In reference to Lenovo's later acquisition of IBM's personal computer unit Liu said, "I remember the first time I took part in a meeting of IBM agents. I was wearing an old business suit of my father's and I sat in the back row. Even in my dreams, I never imagined that one day we could buy the IBM PC business. It was unthinkable. Impossible."

Board of directors

In early 2013, Lenovo announced the addition of Yahoo! founder Jerry Yang to its board. Lenovo's CEO Yang Yuanqing said, "Jerry's appointment as an observer to our board furthers Lenovo's reputation as a transparent international company." Just prior to the appointment of Jerry Yang, Tudor Brown, the founder of British semiconductor design firm ARM, was also appointed to Lenovo's board. Speaking of both men Yang Yuanqing said, "We believe that they will add a great deal to our strategic thinking, long-term direction and, ultimately, our ability to achieve our aspirations in the PC plus era."

Marketing and sponsorships

In 2009, Lenovo became the first computer company to split countries into two groups: growing markets and established markets. They created different plans for each group, and many other companies later followed this idea. In 2012, Lenovo focused on growing its business in places like Brazil and India by buying other companies and spending more on ads.

In October 2013, Lenovo hired American actor Ashton Kutcher to help design and talk about their products. Also in 2013, basketball player Kobe Bryant became a face of Lenovo phones in China and Southeast Asia.

Lenovo has partnered with many sports groups. It was the official computer sponsor for the 2006 Winter Olympics in Turin, Italy, and the 2008 Summer Olympics in Beijing. Lenovo has also worked with the National Football League (NFL) since 2007, becoming their main laptop and computer partner in 2012. In 2018, Lenovo started working with Ducati Corse in motorcycle racing and became the main sponsor for the 2021 MotoGP. Lenovo also partners with the NHL's Carolina Hurricanes and bought the naming rights to their arena, now called Lenovo Center. Additionally, Lenovo is the Global Technology Partner of FC Internazionale and became the official technology partner of FIFA in October 2024.

Lenovo created a movie called The Pursuit for its “For Those Who Do” campaign in 2011. The movie showed a woman using a Lenovo laptop to stay ahead of people chasing her. In 2015, Lenovo held its first “Tech World” conference in Beijing, where they showed new gadgets like small power banks and 3D printers.

In China, Lenovo has many stores close to customers. In India, Lenovo works with big companies and governments to sell computers. They also sell phones through many small shops across the country. In Africa, Lenovo focuses on products that work well without steady electricity, like the Yoga series. Lenovo has been in Singapore since it started and has an office there. In the United States, Lenovo began the “For Those Who Do” campaign in 2010 to attract young people. In 2015, they started the “Goodweird” campaign to show how unusual ideas can become normal, working with online creators to share their message.

Security and privacy incidents

In February 2015, Lenovo faced criticism for including a piece of software on some of its laptops. This software, called Superfish, added ads to search results. However, it also used a weak security method that made user data vulnerable. Lenovo stopped using this software and offered affected customers free security software for six months.

From October 2014 to June 2015, certain Lenovo laptops had special software called Lenovo Service Engine. This software sent basic system information to Lenovo when the laptop was first connected to the internet. It was later stopped because of security concerns.

In 2015, there were also concerns about a program called the Lenovo Customer Feedback program. However, it was found to mostly just collect information about Lenovo's own programs, not general user activity.

In June 2016, a report said that Lenovo was still including unnecessary software that could create security risks. Lenovo advised users to remove an app called "Lenovo Accelerator".

In February 2021, reports said that some Lenovo laptops used by the U.S. military in 2008 had been altered. These laptops might have recorded data entered by users and sent it elsewhere. Lenovo said they were not aware of these claims and had not been informed by the military about any security issues.