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Last updated: November 2, 2011 8:24 pm
The man who founded Lenovo and built it into the world’s second-biggest PC maker by sales has retired as chairman, handing over to his chief executive, in a sign of confidence that its recent turnround is on track.
The retirement of Liu Chuanzhi came as Lenovo’s net profit of $144m in the three months to September beat expectations by soaring 88 per cent compared with the same period last year, on strong PC shipments. Sales rose 35 per cent year-on-year to $7.8bn.
Mr Liu, who will be replaced by Yang Yuanqing, said his retirement from Lenovo would give him more time to concentrate on Legend Holdings, the PC maker’s state-controlled parent company that plans a Hong Kong listing after 2014.
After Lenovo’s acquisition of IBM’s PC business in 2005, the company struggled to build a consumer PC business worldwide and to bring products to market quickly.
When the financial crisis hit, demand in the commercial computing market on which it relies fell heavily, dragging it into losses. Lenovo brought Mr Liu back in February 2009 as chairman and replaced Bill Amelio, its American chief executive, with Mr Yang, also a Lenovo veteran.
Since then the company has seen a strong turnround as it capitalised on the strength in China, the world’s largest PC market by unit shipments, and started grabbing consumer PC market share in other emerging markets, such as India and Russia.
Mr Liu said his retreat signalled his full confidence that Lenovo was set to climb to even greater heights and that Mr Yang would master new challenges, especially in new mobile product markets.
Mr Yang sounded an extremely bullish note. “We have had a fantastic quarter in mature markets,” he said. “It is the first time [our business in] mature markets was bigger than in China.”
The second quarter marked the first time that Lenovo’s joint venture with NEC, which has helped it leap ahead in the Japanese market, and this year’s acquisition of Medion , a German computer supplier, were included in its results.
Mr Yang said Lenovo would continue to push ahead aggressively until it is the leader of the industry, indicating that after the company surpassed Acer and Dell in world PC market share over the past six months, it is now aiming at Hewlett-Packard.
Lenovo said it intended to grow through further acquisitions. “M&A has become a core competency of Lenovo,” said Mr Yang. “We know which companies to acquire and how to integrate them.”
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