Most people have never actually held a Lenovo smartphone, so hearing that they are planning on producing 100 Million smartphones in 2015 might seems a little ambitious. Lenovo has a few tricks up its sleeve for 2015, the Motorola acquisition will be complete (global distribution channels being key) and their band spanking new factory in Wuhan is already in play. Nicole Scott took a trip to both Beijing headquarters and Wuhan factory, to give us a behind the scenes look at one of China's most ambitious companies.
Lenovo has been aggressively moving in to the market for the past few years. About 5 years ago, they kicked off the "Protect & Attack Strategy" to which they attribute their 2013 third quarter revenue, which for the first time topped $10 billion. Five years a later, they have embraced a forward thinking strategy, as the worlds number one PC manufacturer, they have had to figure out how to move forward while embracing their core demographic. During an interview at the Wuhan factory tour, CEO Yang Yuanqing, or YY, spoke about the company's vision of computing. "We don’t think there’s a post-PC era—we see a PC-plus era. We know that the PC is no longer the only Internet-access device, but it’s still critical."
The Wuhan factory was opened in December of 2013, is 200,000 square meters and currently has 3,000 employees manufacturing 30M devices. When the plant hits 100M devices 8,000 people will be employed. The average worker makes $300 a month with dormitory accommodation across the street. Before this plant opened, Lenovo manufactured their devices in Xiamen, Fujian Province, but with Lenovo's success it could not longer meet demand.
Last year Lenovo sold around 50 million units in 2013. To give you some perspective, Samsung sold 314 million and Apple 153.5 million. However, Lenovo's numbers are more impressive than they first appear since they have no presence in North America, Western Europe and most parts of the Middle East and Africa. This speaks to their strength in emerging markets where they started selling its smartphones in 2010.
They've proven they can make in-roads in markets that have huge growth potential, where pieces of the pie were up for grabs because there was just so much pie to go around. But what about in established markets? If Lenovo is serious about being number 1 in all product categories they're going to have to go head to head with Samsung and Apple, markets where billions have been spent on advertising and ... let's just say it... customer brainwashing. (I'm looking at you California Apple Fanboys)
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