Lenovo CEO Breaks With Old Rhetoric For Big Donation

Lenovo’s Yang donates $3 mln to employees

It’s refreshing to see Lenovo’s (HKEx: 992) chatty CEO Yang Yuanqing finally doing something besides boasting about his big plans for the company, with word that he is donating a big chunk of his annual bonus to ordinary employees. I’m a bit too jaded to believe that Yang’s donation of $3 million is a purely selfless act, since he was quite willing to give the media a detailed account of his decision. Still, the latest news comes as a nice break from the usual chatter about new M&A targets and other global aspirations from one of China’s most successful tech firms. Read Full Post…

Lenovo Bid Likely For BlackBerry But Unwise

Lenovo bid for BlackBerry looks likely

As we get bombarded with a slew of quarterly reports from the likes of NetEase (Nasdaq: NTES) and Tencent (HKEx: 700) about their health in the present, I want to turn my attention to the future with a look at an interesting report on potential Chinese suitors for tumbling smartphone maker BlackBerry (Toronto: BB). The report that caught my attention mentions PC giant Lenovo (HKEx: 992) and telecoms equipment maker Huawei as 2 leading candidates to buy BlackBerry, which formally put itself up for sale earlier this week. Read Full Post…

Lenovo Learns How To Say “No”

Lenovo gets pickier towards expansion, M&A

I’ve often criticized PC giant Lenovo (HKEx: 992) for its overly aggressive policies towards M&A and expansion, so I’m quite happy to offer some praise for the company’s sudden ability to say “no” in 2 recent moves that looked problematic. In the last 2 weeks, the company that formerly couldn’t walk away from any expansion deal has suddenly scrapped 2 potential new initiatives, one in smartphones and the other in online gaming consoles. The former instance has seen Lenovo walk away from a plan to take over the struggling cellphone business of Japan’s NEC (Tokyo: 6701), while the latter has seen the company get rid of its game console business called Eedoo. Read Full Post…

Lenovo Raises Funds, IBM Servers In Sight?

Lenovo bond issue: IBM servers in sight?

PC giant Lenovo (HKEx: 992) has announced plans for a major new bond issue, in the latest signal that it still hopes to revive stalled talks to buy IBM’s (NYSE: IBM) low-end server business. More broadly speaking, this announcement also marks a new chapter in Lenovo’s development as it adds bonds to its arsenal of to tools for financing global M&A. In the past, Lenovo typically gave stock to finance a big part of its global M&A, which was the case with its landmark purchase of IBM’s PC business in 2005 and its more recent formation of a joint venture with Japan’s NEC (Tokyo: 6701). Read Full Post…

Lenovo-IBM Deal: Still Life Left

IBM-Lenovo deal still likely

Media are buzzing today with word that talks have broken down in a landmark deal that would see PC giant Lenovo (HKEx: 992) buy the low-end server business from IBM (NYSE: IBM), in a multibillion dollar deal that would have been Lenovo’s largest purchase ever. But my observation from years of reporting this kind of deal is that the story isn’t over yet, and this disagreement is just a negotiating ploy by both sides before they resume their talks and reach a deal. The reason is simple: both sides want to see this deal happen, because it makes too much strategic sense for either to abandon.

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Lenovo Eyes IBM Server Unit

Lenovo, IBM in talks for server sale

It’s been at least a few weeks since the last major M&A rumor involving Lenovo (HKEx: 992), so it seems only appropriate that the acquisitive PC giant is back in the headlines with word of its latest bid for a major global asset. This time the target is the server business of global IT services giant IBM (NYSE: IBM). (English article) Such a move would certainly make sense for IBM, which continues its drive to exit the hardware manufacturing business after the landmark sale of its PC business to Lenovo back in 2005. I’m less certain about the wisdom of the move for Lenovo, although it’s certainly consistent with the company’s pattern of snapping up a steady stream of global hardware assets since the original IBM deal. Read Full Post…

Lenovo Eyes Samsung, Apple 联想加强智能手机业务扩张

Forget about Hewlett-Packard (NYSE: HPQ), the US computer giant that overtook China’s Lenovo (HKEx: 992) to retake the spot as the world’s biggest PC maker late last year. In discussing its latest quarterly results released late on Wednesday, Lenovo’s talkative chief executive Yang Yuanqing had scant time to discuss his company’s recent loss of the global PC crown to HP, a previous obsession for him for much of the previous 2 years. (results announcement) Instead, Yang appears to have turned his sights to some equally big targets in the form of Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL), the world’s top 2 makers of smartphones, as Lenovo makes its own aggressive push into the space.

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Lenovo M&A Addiction Targets Sharp 联想或收购夏普南京电视机工厂

Despite his recent promises that he wouldn’t pursue any new major M&A, Lenovo (HKEx: 992) chief Yang Yuanqing appears to be addicted to purchasing global assets, as reflected by the latest news that he is exploring a potential new tie-up with struggling Japanese electronics maker Sharp (Tokyo: 6753). I’ve previously said that Yang’s addiction to M&A will result in some major challenges for Lenovo in the next few years, as it faces the difficult task of integrating various recently acquired assets in such diverse markets as Japan, Brazil and Germany.

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Lenovo Headed for M&A Hangover 联想激进并购或留下後患

I hate to sound too negative on PC giant Lenovo (HKEx: 992), as I really do admire this company for its noble aspirations to become China’s first truly commercial global tech giant. But that said, I have to say that I’m also increasingly concerned about Lenovo over the next 2-3 years, as its fixation with global acquisitions seems to be going on steroids these days. The company’s growing addiction to global M&A was on display once again in the headlines today with Lenovo’s announcement that it would acquire Stoneware, a US developer of cloud computing products and services. (company announcement)

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Lenovo, SMIC in China-Style Divorces 联想和中芯国际同遭“中国式离婚”

Their relatively low costs and access to the fast-growing China market often make major Chinese tech firms look like attractive business partners to their foreign peers. But big hopes for new partnerships often end in disappointment, resulting in the kinds of divorce we are now witnessing in the new slow-motion break-ups between PC giant Lenovo (HKEx: 992) and Japan’s NEC (Tokyo: 6701); and between global contract chip-making leader TSMC (Taipei: 2330; NYSE: TSM) and Chinese counterpart SMIC (HKEx: 981; NYSE: SMI). In both cases, the foreign companies have just started selling down previous strategic stakes in their Chinese partners, in what’s likely to end in an outright divorce for each pairing.

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Lenovo: China’s Newest Telco? 联想涉足电信服务

I’ll admit that I don’t always have the kindest words for PC giant Lenovo (HKEx: 992), which too often to me looks like a follower rather than a leader, even as it tries to steal the global PC crown from Hewlett-Packard (NYSE: HPQ) in what would certainly be a huge accomplishment for a Chinese company. But that said, I’m happy to say that for once I’m quite intrigued by the latest news that Lenovo is charging into what looks like an unexplored territory for a PC company by teaming with an operator of cloud computing services to offer broadband services specifically linked to its new series of recently launched ThinkPad computers. (English article; Chinese article) The innovative deal, which has Lenovo pairing with a cloud services operator called Macheen, allows users of many new ThinkPad computers to surf the web in the US and most major Western European markets on a plan provided directly by Lenovo. Furthermore, the plan doesn’t require any long-term contracts, meaning users can access the service whenever they want for a flat fee of about $2 per half hour or $9 per day. This kind of model looks interesting to me, as it targets a group of more budget-conscious PC users who might want to occasionally surf the web on their portable computers but wouldn’t want to pay for a separate data plan from a regular mobile wireless carrier. By partnering with another company for the plan, Lenovo is essentially entering the telecoms services sector in a relatively risk-free way, as the telecoms company, in this case Macheen, will be taking most of the risk in terms of providing all mobile Internet services. At the same time, this partnership will allow Lenovo to gain some valuable experience in the telecoms services sector, which it could potentially use in future products including not only new PCs, but also in smartphones, gaming consoles and smart TVs — all areas that Lenovo has entered in the last couple of years and areas that could become important parts of its business in the years ahead. As far as I can see, the biggest risks to the plan lie in many of the usual places, namely in execution and product design. Lenovo isn’t exactly known for its innovative product designs, so if consumers could easily ignore this new product if the new broadband plans aren’t easy to activate and use, and if the ThinkPads themselves don’t integrate the software well. What’s more, it’s also unclear to me if the market is really very big for this kind of broadband mobile plan that appears to target budget-conscious consumers who might not want to sign up for more traditional 3G or 4G data plans. For all these reasons, I would probably only peg this new initiative’s chances of success at less than 50 percent. But regardless of how this individual plan works out, I still have to commend Lenovo for trying something innovative to promote and popularize its products as it chases its ultimate goal of becoming the world’s largest maker of computing devices. At the very least, the plan will also provide it with some experience in telecoms services, which could also become an important area for hardware makers in the future.

Bottom line: Lenovo’s move into telecoms services through a broadband product marks an important step towards more innovation, even though the actual initiative is likely to fail.

Related postings 相关文章:

Lenovo Results: Second Time the Charm? 联想在日德的收购会重蹈覆辙?

Lenovo’s TV Gamble: Failure Ahead? 联想电视赌注:未来会失败吗?

NEC China Cellphones: New Lenovo Tie-Up? NEC计划重回中国手机市场 或与联想联姻