Bottom line: Lenovo’s ejection from the Hang Seng Index caps its long fall from grace over the last four years, and leaves the company in an increasingly deep hole that may be hard to emerge from.
Lenovo ejected from Hang Seng Index
Capping its long fall from grace, PC giant Lenovo (HKEx: 992) has been officially booted from the Hang Seng Index, in a move that looks highly symbolic but also has some very real ramifications for this former high-flyer. It’s probably too early to relegate Lenovo to the history books, but we can certainly say the company is down for the count with this latest blow.
As someone who has followed Lenovo for most of its life as a listed company, I can provide my own view that the company is certainly facing a life-or-death moment in its lifetime that dates back more than three decades, making it one of China’s oldest tech names. I have called repeatedly for the departure of CEO Yang Yuanqing and introduction of some newer, younger blood to the company’s top ranks. But it doesn’t seem that Yang’s boss, Lenovo founder Liu Chuanzhi, cares too much what I think, as he has repeatedly stuck with this right-hand man throughout the company’s decline. Read Full Post…
Bottom line: Lenovo’s new fund raising and roll-out of a retro commemorative ThinkPad 25th anniversary model show the company is focused on short-term fixes rather than the shock therapy it really needs.
Lenovo celebrates 25 years of ThinkPad
With the October 1 Golden Week holiday now in the rear view mirror, we’ll jump back into the latest tech trends with a look at PC giant Lenovo(HKEx: 992), which was in a couple of headlines over the holiday that underscore its ongoing difficulties. The first of those has the company raising $500 million from a group of its core supporters, who are probably the only ones who have faith that this former superstar can right its sinking ship.
The other has the company rolling out a line of retro computers to celebrate the 25th anniversary of its ThinkPad computers, which arguably launched Lenovo on its trajectory that would ultimately take it to the top of the global PC hill. The only problem is that it’s difficult to stay king of the hill for too long in today’s cut-throat high-tech world, and also there’s the fact that PCs aren’t exactly the cutting-edge product they used to be. Read Full Post…
Bottom line: Yang Yuanqing is likely to cede his CEO title at Lenovo to recently returned executive Liu Jun soon, which could be followed by more risk taking and big changes to the company’s lackluster smartphone unit.
Lenovo’s Yang set to cede CEO title?
I used to make fun of mobile carrier China Unicom (HKEx: 763; NYSE: CHU) for its never-ending management reshuffles, but now the more respectable Lenovo (HKEx: 992) is quickly taking that title with its own series of nonstop personnel moves in a bid to right its sputtering ship. What’s interesting to note is that the series of moves are gradually creeping their way to the top of the company, meaning they could eventually unseat chief Yang Yuanqing, which is what I’ve been calling for all along.
This latest move would certainly be the highest yet, and follows Lenovo’s announcement last month of the reorganization of its China region that accounts for more than a quarter of its business. (English article) One part of that overhaul saw the return of former executive Liu Jun to the company to take a top position, and if the latest reports are true Liu could soon take over Yang’s title as company CEO. Read Full Post…
Bottom line: Lenovo’s latest results show a company in transition as it overhauls its struggling smartphone business, and could presage a fledgling turnaround as it focuses on mid-range models with its young Zuk brand.
Lenovo at a turning point?
Newly released quarterly results from the struggling Lenovo (HKEx: 992) are showing some early positive signs, as the company seeks to turn around its miserably performing smartphone business. Lenovo stumbled badly in smartphones, which will play a vital role in its future as its older PC business rapidly matures. The company bet heavily on cheap, low-end models that initially gained big market share, especially in its home market, but then later fizzled due to lack of brand recognition and a reputation for poor quality. Read Full Post…
Bottom line: Lenovo’s smartphone business could ultimately get spun off and separately listed in China, as its continued weak performance could force out CEO Yang Yuanqing later this year.
Lenovo posts first annual loss in 6 years
There’s really not much positive to say about the latest earnings report from struggling PC and smartphone maker Lenovo (HKEx: 992), which has just posted its first annual loss in 6 years. Perhaps we could find an upbeat note in word that the company is on track to achieve $1.35 billion in annual cost savings, though even that’s related to widespread layoffs and other cuts related to its faltering businesses. One might also find rays of hope in Lenovo’s admission that its earlier purchase of Motorola has largely failed, or that it might consider a re-listing in China. Read Full Post…
Bottom line: Lenovo’s decision to tweak the Motorola name is a desperate move to revive the brand, and only postpones an inevitable write-off the company will need to make for the failed acquisition.
Lenovo tweaks Motorola name
In a move that smells of desperation, struggling smartphone maker Lenovo (HEx: 992) has decided to tweak its Motorola brand name whose sales have tanked since being acquired by the Chinese company in 2014. The move will see Lenovo retire the formal Motorola name and simply refer to the brand by its shorter and trendier Moto moniker. More precisely, the brand will become known as Moto by Lenovo.
This particular move isn’t so significant from a financial perspective, since Lenovo isn’t ready yet to ditch the iconic but faded US brand it acquired for nearly $3 billion in 2014. But the reality is that Motorola lost its trend-setting image long ago, and Lenovo’s attempts to reclaim the brand’s luminary past have been a resounding failure. Read Full Post…
Bottom line: Lenovo’s latest overhaul looks promising by combining its older PC unit with its smartphones under a capable leader, but its longtime CEO could still get forced out if the plan doesn’t show signs of success in the next 6 months.
Lenovo in new corporate overhaul
A series of new stories are highlighting the growing rivalry between fast-rising gadget maker Huawei and the older Lenovo (HKEx: 992), which has just launched a major overhaul as it tries to right its fast-sinking ship. The overhaul looks like a last-ditch effort by longtime CEO Yang Yuanqing to save both his company and his own job, following a series of missteps over the last year in the critical smartphone space.
Meantime, other reports are showing how Lenovo is also trying to maintain its globally-leading position in the PC arena with the recent launch of a new series of models from its core ThinkPad series. That launch comes as Huawei gets set to roll out its first-ever rival notebooks. Lenovo actually unveiled its new ThinkPad X1 series back in January, though the actual products are just now beginning to find their way into the market. Read Full Post…
Bottom line: IBM’s sale of its Lenovo shares isn’t surprising since it probably received the stock as part of a recent transaction between the pair, but still comes as the latest sign of no confidence in the struggling Chinese PC giant.
IBM dumps Lenovo shares
Things just keep getting worse for struggling PC maker and smartphone wannabe Lenovo (HKEx: 992). Just 2 weeks after new data showed the company’s smartphone sales plunged in its home China market at the end of last year, new reports are saying that US tech giant IBM (NYSE: IBM) is dumping the Lenovo shares that it received as part of a recent transaction between the pair of companies.
The amount of the sale doesn’t look that big, with IBM looking to sell about $150 million worth of Lenovo shares, the reports say. (English article; Chinese article) But it’s important to note those same shares were worth about twice as much in October 2014, which is when IBM probably first received the stock as part of a sale of its low-end server business to Lenovo for $2.1 billion. Read Full Post…
Bottom line: Lenovo’s longtime CEO Yang Yuanqing should resign or be replaced to make way for new leadership to turn around the company’s struggling mobile unit that will be critical to its future.
Lenovo attends Mobile World Congress
The global smartphone spotlight is in Barcelona this week, as industry giants including China’s Huawei and ZTE (HKEx: 763; Shenzhen: 000063) unveil their latest new models at the world’s biggest telecoms show. But one company that’s unlikely to generate much buzz is PC stalwart Lenovo (HKEx: 992), which has disappointed for the last 2 years by failing to gain traction in a smartphone business that will be critical to its future.
To the contrary, Lenovo saw its smartphone sales tumble last year in its home China market, which accounts for about half of its total revenue. The dramatic plunge is all the more worrisome since Lenovo was hoping for a surge last year after its purchase of Motorola, which once enjoyed a reputation as a global leader but later fell onto hard times. Read Full Post…
Bottom line: The latest muddled comments from Lenovo founder Liu Chuanzhi could reflect his growing frustration with CEO Yang Yuanqing, who could be forced out in the next year if the company’s performance doesn’t improve.
Lenovo’s Yang looks for new rice bowl
It’s no mystery that PC giant Lenovo (HKEx: 992) has been stumbling in the last 2 years due to bad execution in the smartphone space. But slightly more mystifying are new remarks by company founder Liu Chuanzhi on his views about his self-groomed successor and CEO Yang Yuanqing. Liu is currently chairman of Lenovo parent Legend Holdings (HKEx: 3396) and is 71, which isn’t too old. But his remarks on Yang’s performance on the sidelines of a recent event make him seem a bit muddled and also convey the conflicting feelings of loyalty and frustration that he must be feeling about his appointed successor.
Before I attempt to translate his actual remarks, we should put the Lenovo story into a bit of context to understand what Liu is saying. Yang Yuanqing is famous for building Lenovo into a global PC giant through an aggressive acquisition strategy, which began with the landmark purchase of IBM’s (NYSE: IBM) PC business in 2005 and later included other acquisitions in such diverse markets as Germany, Brazil and Japan. Read Full Post…
Bottom line: Lenovo’s latest results show a company on the cusp of prolonged downturn over the next 2-3 years, as efforts to resuscitate its ailing smartphone business look set to sputter.
Lenovo stands at a crossroads
When is a $714 million loss good news? It appears the answer is when your name is Lenovo(HKEx: 992), the world’s biggest PC maker, which has just thrilled investors by reporting the massive loss in its latest quarterly results. It seems investors were braced for even worse, expecting a loss of just over $800 million due to a previously announced $923 million one-time charge as it cleared out massive inventory of its low-end smartphones that have failed to find a market in China or overseas.
Of course I’m being slightly sarcastic in my assessment, since such a massive loss is never a good thing and Lenovo in this case simply wasn’t losing as money as quickly as many were expecting. But the better-than-expected result still sparked a rally for Lenovo’s shares in Hong Kong, with the stock finishing up nearly 6 percent after an earnings report that was quite uninspired otherwise. Read Full Post…
