This week I took a deep dive with Lenovo. It is becoming increasingly clear that Lenovo is unlike any other computer company in unique and impressively powerful ways. First, Lenovo is the only genuinely global computer company with leadership in the U.S. and China. Second, it owns IBM’s PC company, which effectively founded the WinTel PC industry that is dominant worldwide. And finally, other than Apple, Lenovo is the only computer company that seems to get that client devices include smartphones today, and it is also in that market.
Let’s explore Lenovo’s unique market advantages point by point this week.
The only truly global player
China and the U.S. aren’t getting along well now, which is problematic given their respective economies lead the world. This dust-up is not a fight either country is set to win without catastrophic damage to both, and the fight appears to be mutually damaging, as well. However, China still leads in manufacturing, and the U.S. leads in innovation. A company that could bridge this divide has a significant competitive advantage.
Lenovo is the company closest to being like Switzerland in the tech market. It can operate independently of all three countries (including Taiwan) yet maintain enough presence and influence to be well regarded in all three countries. These advantages benefit multinationals, making Lenovo an ideal partner for those businesses suffering through the dispute.
In addition, the expertise Lenovo has developed operating effectively across borders makes it the ideal partner for a company in China or the U.S. (Taiwan’s issues with China go deeper) that wants to also operate across borders during this conflict.
Finally, given most manufacturing is still happening for the tech market in China and Taiwan, Lenovo’s unique relationship with both should assure they can get parts during the logistics nightmare we are all experiencing. This advantage makes Lenovo potentially more reliable than its peers when filling orders in a timely manner.
The IBM PC company
In particular, Lenovo’s decades of experience in the PC market give it two powerful advantages thanks to its acquisition of the IBM PC company. First, it has more institutional experience in its market than any other vendor. Second, the ThinkPad brand is the only PC brand that truly competes at Apple’s level as a premium brand.
These two aspects assure a higher level of brand loyalty to ThinkPad and related lines. Lenovo’s experience helps it avoid remaking past mistakes over the decades that this now blended unit was in business. These unique advantages have allowed Lenovo to enjoy greater customer retention and growth than many of its peers, and it is a substantial part of the company’s competitive advantage.
Smartphones
When the smartphone wave hit, most PC companies tried to get into the market and failed spectacularly, while Apple came close to taking over the market entirely. Lenovo is the only company that approached the market by buying Motorola’s smartphone company, thus gaining the organizational experience they needed to compete in the segment.
The Motorola acquisition started ugly because it had been on the ropes when Google bought it, and then Google further damaged the division critically. But Lenovo has slowly been rebuilding the Motorola unit, and it is now performing competitively with unique designs and capabilities and increasing integration with Lenovo’s PC business. I recently completed testing the Lenovo 14T monitor for PCs to find that it will also work with the current smartphone. Coupled with a wireless mouse and keyboard, it can become a credible cloud-connected PC alternative with decent screen size and performance.
Lenovo has also been working on head-mounted displays for several years, and it is the closest to a breakthrough that could redefine smartphones and PCs in the future, much like Apple was before iPhone.
Wrapping up: Lenovo for the win
Lenovo is a unique company that exists as a unique global entity with leadership predominantly in China and the U.S. and worldwide market penetration. Its other advantages include the unique business-focused ThinkPad brand and Motorola, making it the only PC company other than Apple with an iconic product brand and a significant cell phone presence. These unique advantages position Lenovo well for the future, but they make Lenovo an ideal partner for anyone wanting to penetrate U.S. markets from China or vice versa or for companies that also exist across those geographies.
Finally, because of this breadth and the post-Steve Jobs Apple’s inability to innovate, these capabilities make Lenovo the most likely to shake up the personal technology market of the future.
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