Lenovo's new look: The real deal or is it all talk?

Lenovo acquired IBM's x86 server business and Google's Motorola Mobility unit in anticipation of helping it push a new look, but will the company be able to walk the walk, or is all just for show?
Written by Aimee Chanthadavong, Contributor on

Lenovo has rebranded with a digital and social-first strategy, and a new attitude represented by an adaptable logo and ethos: "Never stand still", replacing "For those who do".

During Tech World 2015 in Beijing, Lenovo outlined that there was huge market potential, especially in Asia Pacific, to target a younger demographic of 18 to 30-year-olds. Nick Reynolds, Lenovo APAC chief marketing officer, labelled Lenovo's target market as "design trendsetters" who are "driving what is cool, what is hip, what is funky, and what is trendy in fashion, music, and technology".

Reynolds went on noting how the company wants to be "disruptive", similar to the Ubers or Airbnbs of the worlds, and will be working towards converting customers into "fans, loyal followers, and then brand ambassadors".

The market saw a sneak preview of this, mainly in the company's consumer-facing business, when Lenovo hired Hollywood celebrity Ashton Kutcher as product engineer for its Yoga Tablet 2 Pro.

The company also kicked off its first company-wide digital campaign last year, called Yoga My Way, which Reynolds boasted reached more than 250 million people worldwide.

As part of its new strategy, the company will be looking into honing in on being more customer centric, said Lenovo APAC president Rod Lappin. The company has launched a pilot of its Voice of Customer project in China, which is expected to be rolled out to India, and then rest of the region.

"We're taking social media feedback, whether it's product or services, and amalgamating and listening to our customers. It's not just about the United States, but we customising it country by country because each country has different needs, and different communications. For example, in Japan we have Goo, but in India it'll be Flipkart," Lappin said.

Lappin said an example was when the company launched its X1 Carbon commercial product and used feedback from customers to improve the design of the product.

There are also plans to enhance its online store presence. At the moment, there are only six e-commerce stores across Asia Pacific, but Lappin said the company is set to increase that number.

"We need to diversify our business into e-commerce a lot stronger than we do today. We have not been in the e-commerce market in Asia Pacific, and it's important because we want to diversify our operations to be able to leverage that," he said.

(Image: Lenovo)

But, why the facelift?

"Our sales are a lot further ahead than our brand. I've got a lot of work to do to get my brand to chase up where our business is at," Reynolds said.

In anticipation of adopting and announcing this new attitude, Lenovo added Google's Motorola Mobility unit to its portfolio for $2.91 billion last year. Lenovo claimed the acquisition bumped the company into becoming the world's third largest smartphone maker. It also made it possible for the company to launch its consumer business in Australia.

Dilion Ye, Lenovo rest of world sales lead, mobile business group, said while it's still early stages since the acquisition, the "synergies" it sees between the two brands will help turn Motorola into a profitable business over the next four to six quarters.

"The competition is really furious. For Lenovo, we want to leverage our in-house capability, our end to end capability to draw out a winning portfolio in a very efficient speed. Basically, we want to launch a new product twice a year," he said.

"At the same time e-commerce is a huge opportunity. Based on the interaction with the customer, we will design an attractive portfolio targeting the online customers, so for this one we are looking at quarterly refreshments to ensure we can attract online customers."

Ye outlined the strength of Motorola is in the premium range of smartphones, targeting mature markets such as Australia, New Zealand, North America, and Europe, while Lenovo has been strategically placed to provide entry-level products for emerging markets, such as India, Thailand, and Indonesia. At the same time, Ye said there are also plans to enter new markets, such as Bangladesh and Myanmar.

To further drive appeal to the younger set, Lenovo has named Chinese actress and singer Fan Bingbing to be the face of the company's soon to be released Lenovo Vibe Shot.

During last year, Lenovo also snapped up IBM's x86 server business for $2.3 billion. Kong Meng Koh, vice president of Lenovo APAC enterprise business group, said the company is now well-positioned to target what it believes is a $100 billion market.

"For the server market and the enterprise market, even though the growth rate year on year is about 1 to 2 percent, it is significantly more than the PC growth rate, which is negative. We see, unlike many vendors out there, the server market has been a growth industry," he said.

"There is a wave of IoT and cloud, and we will hit an accelerated adoption curve in those devices, and we think it will generate environments for servers and storage on the backend. We want to position ourselves for that growth when it happens."

Lenovo's focus on the server market falls under the company's broader strategy to be an end-to-end solutions provider, something in which Koh alluded to as a strategy key competitors, such as HP, have since abandoned.

"One of our competitors said a couple of years ago their business was better together, they now decided they are longer better together, but they're going to be better apart. We're not sure what their strategy is, but our strategy from day one has been very clear, and that is we want to make sure we have every aspect of IT requirements covered from an opportunity perspective," he said.

"If you talk about IoT and mobile, we don't want to be able to just cover the device side, but we want to cover the explosion of demand that is going to be happening on the server processing end, as well as the storage business."

While Lenovo's Q4 financial results took a beating from the acquisitions, the company is confident that it would be able to turn around from the $100 million in earnings reported, a 37 percent dip on earnings from $253 million reported during the third quarter.

The company is also leveraging partnerships with other giants such as Microsoft. The two are partnering bringing together Cortana and Reachit to extend the search capabilities for Lenovo's Windows 10 devices.

Using a unique user-assigned Lenovo ID, Cortana and Reachit will together access data about the content to retrieve a user's personal content, including photos, video, files, and emails. The partnership would potentially search a user's personal cloud accounts, including services beyond Microsoft and Windows such as Google Drive and Dropbox.

Further enhancing its new market position, Lenovo showed off concept products such as Magic View dual screen smartwatch and Smart Cast laser projector smartphone, which it believes will eventually be made to the public.

Lenovo's Smart Shoe also made a short appearance. While still a concept, the Smart Shoe has been designed to display a person's mood on its screen, as well as track and analyse fitness data, including heart beats, calorie consumption, and even direct turn by turn directions.

The company said Smart Shoes is the start of Lenovo's plans to build an ecosystem of internet of things products leveraging its existing cloud infrastructure.

George He, Lenovo senior VP and ecosystem and cloud services, said the company plans to build an ecosystem that will connect apps, developers, partners, and people.

"We're building an ecosystem that includes an open SDK platform, an innovation incubator with professionals from different areas, and smart devices, supply chains, and a powerful backend cloud infrastructure," he said.

"Of course we have billions of users so we're willing to provide an open platform for partners. We're also ready to work with brands to jointly develop products. We're willing to provide accelerators for startup companies."

The plan for a brand refresh, however, will not just be distinguishable externally, but also internally. Lappin, who only succeeded to the top position in April, said part of driving the company's strategy will be to "have fun".

He explained that to "have fun" will bring "a lot of intangible value".

"If we are a standard, bureaucratic, large machine you are going to find that everyone runs KPIs in silos and then you tend to not work," he said.

"I can assure you Lenovo is not a perfect machine; we're pretty good, we're better than our competitors at the moment when you look at the size of us and how we interact with each other we do a much better job, and that's largely because of our social connections with each other. Lenovo is all about internal relationships."

However, in order for there to be any brand regeneration, Lenovo would need to avoid spectacles such as the one related to the recent Superfish, which saw top of line laptops compromised.

"We made a mistake, and we're working very hard to fix. We fixed it and we did it in a very short time at the beginning. We will be improving the way we certify applications of software for our systems going forward. We are committed to a clean, boot up interface now for our customers," Kong said.

In the past, Lenovo has also been rumoured to have been linked to the Chinese government for participating in spy activities, but Koh denied any relationships, and said security is at the top of mind.

"We are not a China company, or a Chinese company, we are a global company that happens to have a heritage that came out of China; that's the only thing we've got," Koh said.

Disclosure: Aimee Chanthadavong travelled as a guest of Lenovo.

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