Lenovo aiming high after two major deals


The world’s biggest personal computer maker, Lenovo, is now aiming high after closing two major deals with tech leaders IBM and Google.

Lenovo’s $2.3 billion purchase of IBM’s x86 server business and its $2.91 billion acquisition of Motorola Mobility from Google are evidence of the company’s ‘global ambitions’, said DCA Chine-Analyse, Jean-Francois Dufour.

“Just as iPhones and iPads have overtaken Macs in commercial importance for Apple, smartphones and tablets are expected to replace PCs in part for Lenovo,” Dufour added.

Since Jan. 23, after the plans of the Chinese tech giant acquiring IBM’s x86 server business was announced, Lenovo’s stock price jumped more than 6 percent at the Hong Kong stock exchange, hitting its highest level in last 13 years. In the past six months, the company’s stock price has jumped 53 percent, beating Apple’s 10 percent rise in that time and Samsung’s flat performance.

Yang Yuanqing, Lenovo Chief Executive Officer, with the recent major acquisitions is trying hard to transform the Chinese PC maker into a credible rival to the leading phone makers Apple and Samsung by introducing new products and expanding into new markets.

Lenovo Americas Group’s executive vice president in charge of the servers group, Gerry Smith, said on Jan. 23 that the company is also seeking opportunities in servers, which offer margins almost double the margins of Lenovo’s current businesses.

“This is a bigger margin pool for us than PCs, so we’re excited,” he said.

After acquiring IBM’s server business, Lenovo will be the world’s third-largest server brand, up from No. 6, with a 14 percent market share. Currently, the company holds less than 2 percent share of the server market.

Also With its Motorola Mobility purchase, the Chinese tech giant aims to replicate its PC market success in the smartphone segment as well.