History[ edit ] Founding and early history[ edit ] Liu Chuanzhi founded Lenovo on 1 November with a group of ten engineers in Beijing with , yuan. The Chinese government approved Lenovo's incorporation on the same day. Eleven people, the entirety of the initial staff, attended. Each of the founders was a middle-aged member of the Institute of Computing Technology attached to the Chinese Academy of Sciences.
The group rebuilt itself within a year by conducting quality checks on computers for new buyers. Lenovo soon started developing a circuit board that would allow IBM-compatible personal computers to process Chinese characters. This product was Lenovo's first major success. Lenovo also tried and failed to market a digital watch. Liu said, "Our management team often differed on which commercial road to travel. This led to big discussions, especially between the engineering chief and myself.
He felt that if the quality of the product was good, then it would sell itself. But I knew this was not true, that marketing and other factors were part of the eventual success of a product.
In , Lenovo started to manufacture and market computers using its own brand name. The ad was placed on the front page of the China Youth News. Such ads were quite rare in China then. Out of the respondents, were selected to take a written employment exam. Although interviewers initially only had authority to hire 16 people, 58 were given offers. The new staff included 18 people with graduate degrees, 37 with undergraduate degrees, and three students with no university-level education.
Their average age was Liu's father, already in Hong Kong, furthered his son's ambitions through mentoring and facilitating loans. Liu moved to Hong Kong in To save money during this period, Liu and his co-workers walked instead of taking public transportation. To keep up appearances, they rented hotel rooms for meetings. Prior to its IPO, many analysts were optimistic about Lenovo. The company was praised for its good management, strong brand recognition, and growth potential.
Analysts also worried about Lenovo's profitability. Lenovo's IPO was massively over-subscribed. Proceeds from the offering were used to finance sales offices in Europe, North America and Australia, to expand and improve production and research and development, and to increase working capital.
They had little understanding of the rules and responsibilities that went along with running a public company. Before Lenovo conducted its first secondary offering in , Liu proudly announced the company's intent to mainland newspapers only to have its stock halted for two days by regulators to punish his statement.
This occurred several times until Liu learned that he had to choose his words carefully in public. The first time Liu traveled to Europe on a "roadshow" to discuss his company's stock, he was shocked by the skeptical questions he was subjected to and felt offended.
Liu later came to understand that he was accountable to shareholders. I relied on my own initiative to do things. We began to think about issues of credibility. Legend began to learn how to become a truly international company. Under her leadership, Lenovo successfully integrated Western-style accountability into its corporate culture. Lenovo's emphasis on transparency earned it a reputation for the best corporate governance among mainland Chinese firms.
All major issues regarding its board, management, major share transfers, and mergers and acquisitions were fairly and accurately reported. While Hong Kong-listed firms were only required to issue financial reports twice per year, Lenovo followed the international norm of issuing quarterly reports. Lenovo created an audit committee and a compensation committee with non-management directors. The company started roadshows twice per year to meet institutional investors.
Ma organized the first-ever investor relations conference held in Mainland China. Liu and Ma co-hosted the conference and both gave speeches on corporate governance. Lenovo's new logo, created by Saatchi, New York, can be changed by its advertising agencies and sales partners, within restrictions, to fit the context.
It has a lounging "e" and is surrounded by a box that can be changed to use a relevant scene, solid color, or photograph. Lenovo's Chief Marketing Officer David Roman said, "When we first started looking at it, it wasn't about just a change in typography or the look of the logo. We asked 'If we really are a net-driven, customer-centric company, what should the logo look like?
The bonds will be sold in Hong Kong with coupon ranging from 4. This is only the second sale of bonds in Lenovo's history. Financial commentators noted that Lenovo was paying a premium to list the bonds in yuan given relatively low costs for borrowing in American dollars. One of its most important features was a button that instantly connected users to the Internet and opened the Web browser. It was co-branded with China Telecom and it was bundled with one year of Internet service.
The Tianxi was released in It was the result of two years of research and development. It had a pastel-colored, shell-shaped case and a seven-port USB hub under its screen. As of , the Tianxi was the best-selling computer in Chinese history. It sold more than 1,, units in alone. Lenovo has a dedicated mergers and acquisitions team that tracks the progress of these integrations. Lenovo has an annual meeting where the management of newly acquired companies meets with its top executives.
In these meetings, held in English, Lenovo explains its global strategy and how new executives fit into its plans. This acquisition made Lenovo the third-largest computer maker worldwide by volume. We got the ThinkPad brand, IBM's more advanced PC manufacturing technology and the company's international resources, such as its global sales channels and operation teams.
These three elements have shored up our sales revenue in the past several years. The deal has been already approved by Europe, China and the United States. Lenovo also announced plans to start integrating IBM's workforce. Lenovo said that it has no immediate intent to cut jobs. Lenovo plans to cut prices on x86 products in order to gain market share. Though this acquisition in ultimately resulted in success, the integration of the businesses had a difficult and challenging beginning.
Lenovo had employees from different cultures, different backgrounds, and different languages. At the end of its first two years, Lenovo Group had met many of its original challenges, including integrating two disparate cultures in the newly formed company, maintaining the Think brand image for quality and innovation, and improving supply chain and manufacturing efficiencies.
By , Lenovo grew into the world's number 1 PC maker, number 3 smartphone manufacturer and number 3 in the production of tablet computers. As of , LeGarden had more than 1, programs available for the LePhone. At the same time, LeGarden counted 2, individual developers and developer companies as members. Lenovo passed Apple to become the No. The companies said in a statement that they would establish a new company called Lenovo NEC Holdings, to be registered in the Netherlands.
Lenovo has a five-year option to expand its stake in the joint venture. NEC spun off its personal computer business into the joint venture. Lenovo and NEC also agreed to explore cooperating in other areas such as servers and tablet computers.
These included over 3, patent families in countries around the world. The purchase included standards-essential patents for 3G and LTE cellular technologies and other patents related to smartphones and tablets. Lenovo said the acquisition would double its share of the German computer market, making it the third-largest vendor by sales after Acer and Hewlett-Packard.
The deal, which closed in the third quarter of the same year, was the first in which a Chinese company acquired a well-known German company. Gerd Brachmann, chairman of Medion, agreed to sell two-thirds of his 60 percent stake in the company. He will be paid in cash for 80 percent of the shares and will receive 20 percent in Lenovo stock. That would give him about one percent of Lenovo. An additional payment of million reals was made dependent upon performance benchmarks.
Lenovo cited their desire to take advantage of increased sales due to the World Cup that would be hosted by Brazil and the Summer Olympics and CCE's reputation for quality.
The transaction was expected to close by the end of ; no financial details have been disclosed. More specifically, Stoneware was acquired to further Lenovo's efforts to improve and expand its cloud-computing services. For the two years prior to its acquisition, Stoneware partnered with Lenovo to sell its software.
During this period Stoneware's sales doubled. Stoneware was founded in As of September , Stoneware is based in Carmel, Indiana and has 67 employees.