2018 proved to be a good year for Lenovo, in particular Q3 was quite fruitful, with the firm achieving first place in the PC industry with a record market share of 24.6 percent.
Other aspects of the business, namely data centres and mobile devices (Motorola) had a strong quarter too, and during MWC last month Lenovo unpacked its strategy for 2019 and how it plans to build upon the momentum of last year.
This is what the Chinese company had to say.
If it ain’t broke
Continuing with the trend of a record quarterly showing, Lenovo’s revenue reached an all-time high of $14 billion, which represents an 8.5 percent year-on-year increase. PCs and smart devices especially performed well, with a 12 percent rise YoY, and amounting to $10.7 billion of the aforementioned total.
While data centres did not rake in as much money, this segment performed well too, marking the fifth consecutive quarter of growth for the company, as well as a significant jump in revenue by 31 percent to $1.6 billion.
As for the Motorola brand, it hit a major milestone by posting its first worldwide profit ever since being acquired by Lenovo in 2014. To continue that positive growth for the Motorola brand, Lenovo says it plans to double down with its current strategy. Namely by reduce expenses, focusing on specific markets like Brazil and streamline their portfolio of products.
What that means for South Africa, with Motorola’s presence dying down significantly ever since the brand relaunched in the country a couple of years ago with the Moto Z, is unclear. To that end Lenovo has no greater insight, but SA remains a key territory for the company.
With the brand’s PC business strong, and data centre offerings on the rise, they’re aiming to find the right niché for this region, as they have down in Brazil, where it’s a market leader with its G series smartphones.
Room for growth
Shifting focus to Lenovo’s other segments, the organisation wants to build new growth engines for the business, as well as invest in emerging technologies, they explained to us at MWC 19 in Barcelona.
When it comes to the former, Lenovo wants to strengthen its number two spot as a manufacturer among SMB (small-to-medium-business) customers. Their workstations in particular are doing well at 20 percent, along with visual-based products increasing in volume by 45 percent year-to-year.
Another PCSD (PCs and Smart Devices) segment where Lenovo is looking for growth is gaming, with the company’s Legion products leading the charge on that front. The firm doesn’t have numbers in that regard, but with the likes of HP also entering the gaming fray, and going against some already well established players, it should be interesting to see if Lenovo can make some inroads there.
Looking at the areas where Lenovo wants to make greater investments, augmented, virtual and mixed reality are the most noticeable. We’ve already seen them make strides with their Mirage Solo VR headset, which is currently being piloted for use in the education field. As such we should be expecting more devices from Lenovo in coming years, with 5G also opening up the possibility for advanced applications.
Lenovo also wants to go smart. This includes smart displays, as well as smart speakers or interfaces for the home and office. To that end the company has partnered with Google to launch a few smart speaker and smart screen offerings, which when paired with others in a larger ecosystem, could make an intriguing interconnected environment.
The likes of Amazon, Apple and Samsung are also aiming to lead this field, so Lenovo will have its work cut out to be a major player in the smart market.
The power of 5G
The final aspect of 2019’s plans lies with 5G, as it does with most of the companies that attended MWC 19.
As it pertains to Lenovo, they’re placing a lot of emphasis on the edge, delivering both more computing power and a number of devices for this element of an IoT environment.
In the coming year Lenovo will be using a combination of 5G and edge computing in order to bridge digital gaps, explains the company. This will take the guise of reducing the need for on-premise servers, as well as enhancing an organisation’s data processing capabilities, as well as ensuring higher bandwidth and promising reduced latency.
With the new broadband standard yet to be realised locally as we wait for spectrum, if Lenovo can indeed deliver on its 5G ambitions, it could very well be a major player on the business front.
As such 2019 looks to be a big year for the Chinese firm, especially as it looks to bring the other aspects of its business on the same level as its successful PC one.