10 Years After IBM PC Deal Lenovo Keeps on Evolving

by Jeffrey Burt

The company launched in Beijing in November 1984 with the name Legend, and over the years it grew into China’s largest PC vendor. It went public in 1994.

By 2002, CEO Yang and other executives decided to expand the company internationally, and changed the name to Lenovo to avoid competition with the multitude of businesses internationally that used the name Legend.

IBM, which was looking to get out of the quickly commoditizing PC market it helped found two decades earlier, sold the business to Lenovo for $1.25 billion in April 2005. Lenovo immediately became a significant player in the PC industry, which only three years earlier had seen HP’s $25 billion acquisition of rival Compaq. A year later it launched its first Lenovo-branded PCs.

It took awhile—about seven years—but Lenovo in August 2012 moved past HP and Dell to take the top spot on the list of the world’s largest PC vendors. HP would briefly take back the crown, but Lenovo later in 2013 again reached the No. 1 spot. In the first quarter, Lenovo had 18.9 percent of the PC market, according to Gartner analysts.

Over the 10 years since the IBM PC deal, Lenovo has made a series of other acquisitions, including Medion (electronics manufacturing) in 2011, CCE in 2012 (electronics) and Stonewear in 2012 (cloud software).

In 2011, Lenovo and NEC created a joint venture called Lenovo NEC Holdings to produce PCs. The work with NEC continued in 2014, when Lenovo bought more than 3,800 mobile technology patents from NEC.

Lenovo and storage giant EMC in 2012 created a joint venture called LenovoEMC to build x86 servers for SMBs. Lenovo also agreed to OEM EMC products. The companies expanded the partnership in 2013 to develop network-attached storage (NAS) solutions for SMBs that had been offered under EMC’s Iomega division.

Company officials in January 2014 announced a $2.1 billion deal to buy IBM’s x86 server business. The deal closed in September, and overnight Lenovo—which already had a portfolio of ThinkServer x86 systems—became the world’s third-largest server maker.

Days after announcing its intention to buy IBM’s commodity server business, Lenovo said it was buying Motorola Mobility from Google for $2.91 billion. Again, Lenovo already had some smartphones and tablets in the market, but the deal for Motorola made the company the third-largest smartphone maker in the world.

Lenovo not only wants to be the largest PC vendor in the world, but also the biggest computer maker, whether it’s PCs, tablets, servers or smartphones. The acquisitions of IBM’s server businesses and Motorola help accelerate Lenovo’s PC Plus ambitions.

In 2015, Lenovo officials said the company has sold 100 million ThinkPad laptops.

On May 28, Lenovo is hosting Lenovo Tech World in Beijing, its first global tech conference. At the show, company officials will talk about plans for future devices, including smartphones, wearable technologies and smart connected devices, and will demonstrate R&D concept projects.