Lenovo's next growth act will be much trickier

Summary:Lenovo's fiscal 2013 growth plan revolves around SMB, consumer, mobile and enterprise gear. The competition will heat up dramatically in those areas.

Lenovo capped off a strong fiscal 2012 with solid fourth quarter results and outlined its growth plans for the year ahead. The master plan revolves around focusing on mobile, SMBs and enterprise systems.

In other words, Lenovo's fiscal 2013 growth will be harder to pull off.

As noted by Andrew Nusca, Lenovo has quite the growth tale. The company reported a fourth quarter profit of $67 million on revenue of $7.5 billion, up 54 percent from a year ago. Operating profit was $102 million.

For fiscal 2012, Lenovo reported earnings of $475 million on revenue of $29.57 billion, up 37 percent from a year ago. The results were boosted by the acquisition of Medion and a joint venture with NEC.

But the upcoming fiscal year will bring a bit of reality to the table. For starters, Lenovo is likely to see a PC pause ahead of Windows 8. In addition, Lenovo is facing a mature PC upgrade cycle.

And new ventures such as smartphones and tablets are largely unproven. Sure, sales growth is strong, but the base is small.

Here's a look at Lenovo's protect and attack strategy:

The wild cards break down like this when it comes to Lenovo's growth.

  • Consumer and SMB sales. Lenovo can continue to grow, but the prosumer competition is intense in mature markets. Lenovo has focused on China and emerging markets and the strategy has worked well. Rest assured other PC markets also see emerging markets as their meal ticket.
  • Mobile sales. In China, Lenovo is trying to be a consumer brand. The hurdle: Apple, Samsung and others. Lenovo will get more traction, but its mobile efforts are largely unproven.
  • Enterprise. Lenovo is a workstation and server player in China. It plans to expand its global reach. The server market is going to be challenging for Lenovo to crack outside of China.

Topics: Servers, Enterprise Software, Hardware, Lenovo

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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