Lenovo changed again.
On May 8th, Yang Yuanqing, Chairman and CEO of Lenovo Group, through internal letter, announced the formal establishment of a new smart device business group (IDG for short), Lenovo PC and smart device business group (PCSD), and mobile business group (MBG). Integrated into smart device business group.
Prior to May 4, Hong Kong's Hang Seng Index Co., Ltd. announced that since June 4th, Lenovo Group will be removed from the 50 constituent stocks of the Hang Seng Index, which will be replaced by the Shimao Group. Lenovo responded by saying, 'We respect The results of the audit of the Hang Seng Index, but we are particularly concerned about the company's continuous transformation, and bring sustainable long-term returns to shareholders. We believe that the review results of the Hang Seng Index will not have a long-term, substantive impact on our stock performance.'
This is the second time that Lenovo Group has been excluded from the Hang Seng Index. Lenovo entered the Hong Kong Hang Seng Index for the first time in 2000, but it was removed after six years and rejoined in March 2013. On May 9, Lenovo's Hong Kong stock closed at HK$3.71. The market value is HK$44.575 billion. Since being included in the HSI in 2013, the share price of Lenovo Group has dropped by approximately 57%.
Wealth report good news, the stock price has been all the way down
Why Lenovo was excluded from the Hang Seng Index? On the surface, it is because of the lack of stock price.
Shortly after entering 2018, Lenovo's stock price entered a downtrend channel, which fell from around HK$4.7 at the end of January. On May 9, Lenovo's share price closed at HK$3.71, a decrease of approximately 21%.
Surprisingly, Lenovo's recently released financial report for the third quarter of fiscal year 2017/2018 gave a good transcript. The group’s total revenue was approximately US$13 billion, setting a new single-season high in the past three years. The pre-tax profit for the quarter reached US$150 million, a 48% increase compared to the same period last year. This is the first time that Lenovo has realized a year-on-year increase in pre-tax profit since the last five quarters.
As business performance picks up, why did the stock price fall?
In the eyes of many investors, Lenovo's two main business: PC and mobile phone business are sick, and it is difficult to improve in the short term.
According to the third quarter results of Lenovo's 2017/2018 fiscal year, revenue from PC and smart device business rose 8% year-on-year to US$9.25 billion, accounting for approximately 72% of overall revenue. PC is clearly the most important revenue pillar for Lenovo.
According to research firm IDC and Gartner, Hewlett-Packard defeated Lenovo in the global PC market in 2017.
IDC data shows that in the first quarter of 2018, Hewlett-Packard regained the No. 1 position in PCs with a share of 28.8%, Lenovo ranked No. 2 with a market share of 21.4%. At the same time, the overall PC market is in decline, Gartner data show, first in 2018. Global PC shipments during the quarter totaled 61.7 million units, which was a 1.4% decrease from the first quarter of 2017. The PC market experienced a downward trend for the 14th consecutive quarter.
On the other hand, mobile phone business, according to research company Counterpoint's 2017 global smartphone sales rankings, Lenovo mobile phone sales of 49.7 million, the world's No. 8, the market share of only about 2%.
The downturn of the two main businesses caused Lenovo's annual financial report data to continue to decline. In 2014, Lenovo Group’s operating income was US$46.3 billion. In 2015, it declined to US$44.9 billion. In 2016, it fell again to US$43 billion. The 2017 annual financial report Unpublished.
Is it useful to return Fujitsu to Fujitsu?
At the Lenovo 2018 swearing-up meeting held last month, Yang Yuanqing proposed returning the PC business to the first place. The acquisition of Fujitsu is an important link for Lenovo to return to the PC market first.
Recently, Lenovo Group issued an announcement stating that Lenovo Group's purchase of 51% of FCCL from Fujitsu has met all the conditions precedent for the sale and purchase agreement, and 51% of the total issued share capital of FCCL has been completed on May 2, 2018. According to related media reports, after Lenovo bought Fujitsu, the combined market share of the two will exceed that of HP. Lenovo will return to the market first.
However, there are views in the industry that PC is a shrinking market. Being the boss of this market does not explain too many problems. The head of the first mobile phone industry research institute Sun Yanxi told reporters that Lenovo’s spending on Fujitsu acquisition was a gradual process. Shrinking market, acquiring a company that can't go on.
In addition, in addition to Hewlett-Packard, Dell's old rival to these PC businesses, Lenovo is facing the challenge of new players.
Sun Yanxi believes that Lenovo is currently faced with the problem of cross-border competition. In a sense, computers used to be entertainment tools and information acquisition tools. Now, some of these functions are replaced by mobile phones. Due to the portability of notebooks, mobile phone companies have entered notebooks in succession. Market. “Thinkpad has a little red dot. Other innovations are basically stagnant. Those competitors who come from across the border, Huawei, Xiaomi laptop, Lenovo have almost no response.”
Huawei consumer CEO Yu Chengdong said in an interview with the media that PC is still an indispensable tool. Due to the slowness of traditional PC innovation, it failed to integrate into smart terminal scenarios, and because sales have been declining year after year, it has caused the PC market to falsify. Using the idea of mobile phone as a PC, the mobile-first strategy can better realize the user's switching between life and work scenarios, and provides a possibility for seamless switching between mobile phones and PCs. This is the case for Huawei and Xiaomi. Can be reflected.
Wan Hao, chief operating officer of Huawei’s consumer business, once told the media that “Now laptops are still mainly tools. But when artificial intelligence, big data, and mobile phones, wear and other products are connected and interoperable, and artificial intelligence more understands consumers.” At the time, it will create a lot of new space and areas.
Lenovo once again 'change array' behind
On May 8th, Lenovo announced an organizational restructuring. The new smart device group will be led by Gianfranco Lanci, president and chief operating officer of Lenovo Group. Liu Jun, executive vice president of Lenovo Group and president of China, will serve as the head of smart device business group in China. Report to Gianfranco Lanci.
Yang Yuanqing, chairman and CEO of Lenovo Group, stated in his internal letter: 'The industry we are in is undergoing major changes, from the PC Internet and mobile Internet to the new phase of smart Internet of Things (Intelligent IoT). To the future, we must put ' Smart Devices (Intelligent IoT) + Cloud's business is taking a new height.
According to Lenovo, no single hardware device will be used as an independent organizational unit, but PCs, smart phones and other smart devices will be opened in the organizational unit to form a complete and open intelligent IoT platform.
According to Lenovo's plan, the establishment of the smart device business group will accelerate the convergence of technologies (especially computing and communication technologies), making all types of devices more intelligent and seamless.
In the eyes of many people in the industry, Lenovo should change, but the frequency of change is a bit faster. Especially in the mobile phone business, frequent changes in coaching, but the effect is not clear.
According to media reports, in 2013, Lenovo was split into Lenovo Business Group and Think Business Group. Liu Jun was also responsible for PCs and mobile phones. At the time, when Xiaomi began to popularize mobile phones on behalf of the Internet, Lenovo still relied on cheap mobile phone and carrier channels.
In 2014, Lenovo's two major business groups were split into four independent business groups, namely PC business, mobile business, enterprise business and cloud service business. Liu Jun shifted from Lenovo business group to mobile business, focusing on mobile phones, tablet PCs and smart TVs. .
In 2015, Lenovo Group once again adjusted to three major groups: personal computer business, enterprise business and mobile business. Liu Jun withdrew from Lenovo management and Chen Xudong took over. The magical workshop that brought Lenovo's mobile phone hope and the ZUK brand died.
In 2016, Lenovo returned to the four major sectors: Personal Computers and Intelligent Device Group (PCSD), Mobile Business Group (MBG), Data Center Business Group (DCG), Lenovo Venture Capital Group (LCIG). Lenovo said it will use Lenovo , Motorola's dual-brand strategy, Motorola positioning global brands, covering high-end user base, the main line, Lenovo brand-based Chinese market, take the people-friendly route, the main online.
In 2017, Liu Jun returned to serve as Group Executive Vice President and President of China. Lenovo China reorganized into PCSD and DCG.
In the eyes of the outside world, the Lenovo Group's torment over the years shows that the leader lacks strategic vision and operational patience.
Will the Lenovo handset be acquired?
Recently, there are rumors that Xiaomi is likely to acquire the mobile phone division of China’s largest company, L, and speculated that Xiaomi will buy Lenovo’s mobile phone business. Chang Cheng, vice president of Lenovo Group, posted on Sina’s Weibo, saying “About those The rumors of the acquisition, the melon people scattered it. June beasts out of the cage, and other business contacts. The contest has just begun.
In the fourth quarter of last year, Lenovo’s mobile business revenue dropped 5% year-on-year to US$2.076 billion, and mobile business accounted for approximately 16% of the Group’s total revenue.
In its financial report, Lenovo stated that the competition in the Chinese smartphone market is still fierce. Lenovo’s smartphone business is undergoing a phase of business transformation and is focused on improving its strategy. As a result, its revenue and sales continue to decline year-on-year.
According to statistics of global smartphone sales in 2017 released by research firm Counterpoint Research, the sales volume of Lenovo smartphones in 2017 decreased by 2% year-on-year, from 50.7 million units in 2016 to 49.7 million units in 2017, ranking 8th in the world. , The market share is only about 2%. The performance of the domestic market is even worse. According to GFK data, Lenovo mobile phone sales in the domestic market was only 1.79 million, and the market share was less than 1%.
On May 7th, the Beijing News reporter saw Lenovo counters in Tiantong's Suning's Yigou store that only five Motorola handset models were placed on the counter. Huawei, OPPO, and Vivo counters are all equipped with real machines for consumer experience. A mobile phone salesman said that all five Motorola handsets are not in stock. If they want to buy one, they will have to wait until one day to transfer goods from other places. 'Mainly there is no special sales staff, the business is not good, and the sales are five months a month. The amount is also very difficult to achieve, to buy are already specifically promising. '
Since 2018, the oligopolistic pattern of the domestic mobile phone market has become more prominent. QuestMobile released the first quarter of 2018 China Mobile Internet data report shows that as of March 2018, Apple, OPPO, Huawei, Vivo, millet five head player market The sum of scale is 82.3%, and many other mobile phone brands have less than 20% market share.
One response to the Lenovo mobile phone is channel change.
Corresponding to the establishment of the smart device business group, Lenovo’s offline sales channels are also undergoing an accelerated transformation. It is reported that Lenovo’s first Zhi Life Direct Store has opened in Jinyuan Yansha Store for 2 months, through smart retail upgrades to its stores, in stores. In the case of no changes in floor, location or area, the flow of visitors to the store doubled, conversion rate increased by 1.5 times, and sales increased by more than 2 times.
The new products of Lenovo Zhi Life’s direct-operated stores include Lenovo’s own branded products, Lenovo’s branded products and Lenovo’s selected products, which cover smart homes, smart wear and travel, and full-scene entertainment. In the future, the total number of online and offline product categories will exceed 1,000.
The outside world has the view that Lenovo’s smart life shop is in the benchmark Xiaomi House. However, Xiaomizhijia’s products are produced by Xiaomi’s investment in ecological chain companies. Xiaomi will participate in product design and definition, so the style of Xiaomi’s ecological chain products is roughly Unite.
In contrast, Lenovo's smart life is notorious for the ecological chain construction. Can we introduce excellent third-party products like Xiaomi to unify the product style? The industry will wait and see.