A Year of Powerful, Intelligent, and Unprecedented Transformation

Yuanqing Yang, Lenovo Chairman and CEO

Without question fiscal year 18/19 has been Lenovo’s best yet.  Record revenue fueled by strong execution and unfaltering tenacity – and our ambition to repeat this success continues unabated. 

As I look back over the past year I am extremely proud of Lenovo’s progress and achievements and incredibly positive about our future.   I say this knowing that we are in a time of great global transformation – economically, socially and environmentally, and that for businesses to thrive in today’s fast paced, uncertain and changing world they too have to transform.

In fact our history has been – and continues to be – one of transformation.  From opening up China to PCs in the early 1990s, to how we have driven device transformation with new form factors.  From the multiple acquisitions we’ve made to fuel our global depth and breadth, to how our data center technology is powering work that is designed to solve some of humanity’s biggest challenges.  Transformation is our new normal.

Which is why with the world as it is today we are focusing on how we ‘intelligently transform’ ourselves as well as how we enable our customers around the world to do the same.

This year Lenovo led the way across every part of the business.

2018/19 Annual Report

Our Intelligent Devices Group continued to lead the PC and Smart Devices industry.  For our fiscal year 18/19 we are the #1 PC company in the world (IDC), using our scale and innovation to redefine the category.  We achieved record market share of 23.4% in our fiscal year and remain the fastest growing among the top five players.  We lead in terms of size and scale, but more importantly profitability, delivering the industry’s highest profitability in the PC sector.  However, what stands out is our continued leadership in customer-led innovation – something that has always been at the heart of Lenovo.  Not only do I believe we have a wider and deeper portfolio than any other company, it is our attitude about innovation that makes us stand out.  Challenging the status quo, changing what’s possible and rethinking form factors that change what we do, how we do it and most importantly why. We have created dual screens that can literally be written on (our Yoga Book C930) and a hinge that incorporates the world’s first rotating sound bar (our Yoga C930). We have continued to supercharge the evolution of the iconic ThinkPad line, recently previewing the industry’s first foldable PC screen technology and debuted ThinkReality and ThinkIoT solutions for smarter businesses of the future. Great innovation might wow and win awards but we push the boundaries of innovation for one reason only – so that we can create better, smarter tech experiences for all. 

Our Mobile Business Group (MBG) has thrived too.  We were first to market with 5G – launching the world’s first 5G upgradeable phone, the Moto Z3.  In addition, fiscal year Q3 saw us post our first worldwide profit since the Motorola acquisition in October 2014. These notable achievements came from masterful execution of our strategy to reduce expenses, create a more competitive product portfolio and focus on core markets. This business continues to innovate with the year ahead set to bring even more exciting products. Globally this business is now right-sized for future growth.

In the last 12 months our Data Center Business Group (DCG) has truly transformed from a one dimensional traditional server business into a complete portfolio data center organization – while at the same time hitting record revenue of over $6BN.  This evolution has included joint ventures such as the one in China with NetApp, new global strategic partnerships, technology breakthroughs and numerous industry accolades and recognition.  We are the #1 provider of TOP500 supercomputer systems with installations tackling society’s toughest computational challenges; we power 17 of the top 25 research universities in the world and have been in the number one position in x86 server reliability globally for the last six years and number one in customer satisfaction for the last five. These major milestones have positioned us for even faster growth and make us encouraged about the opportunities we see from this business.

Our Lenovo Capital and Incubator Group underpins our business today by identifying and investing in some of the most exciting and game-changing technologies of the future that support our ongoing transformations across each of our business units.

Strategic Focus FY 19/20 and beyond

As we look to the future, our vision is to bring smarter technology to all – through Smart IoT, Smart Infrastructure and Smart Verticals. This is the next chapter in the Lenovo story – where we see our greatest opportunity for future growth and industry leadership.

Smart IoT – this is the touchpoint for the connected world we live in. Firstly, it is about making current devices smarter – always connected, easy to collaborate with other new devices, adaptive to a customer’s needs, seamlessly connecting to the cloud etc – like Lenovo’s Smart Clock, Smart Camera and Smart Lock.  This always on / always connected view of the world has unlimited potential meaning ordering a pizza through a speaker or unlocking a door with “a look” is a reality. Beyond that it is about embedding smart computing power into hundreds of devices that are not yet smart – in schools, homes, factories, hospitals and much more.  

Smart Infrastructure – this foundation provides the computing, storage and networking power to support intelligence.  The number of smart devices worldwide will reach 20 billion by 2020, more than double the number in 2017, which in turn means data is doubling in volume every two years.  It is this infrastructure engine that powers public cloud companies, high-performance computing for scientific computing and AI companies and is the backbone of every organization today. 

Smart Verticals – the combination of big data harnessed from smart devices and the computing power of smart infrastructure is already seeing Lenovo create models that provide insights for customers that can dramatically improve business processes, decision-making and financial return – ultimately solving tangible business problems. As a result, we are transforming industries that have not yet been able to realize the benefits of what technology can bring.

A wider responsibility

But business results are just one measure of our success. As a company with 57,000 employees, doing business in 180 markets across the globe we have a critical role and responsibility in the world today and a belief, in line with the World Economic Forum’s objectives, that in our shared digital future no one should be left behind.

For Lenovo this means being diverse and inclusive in all that we do. It means being able to stretch and adapt to the values, policies, and culture of the countries where we do business; to look like, sound like, and reflect our entire customer base no matter where they are; and to understand the once-in-a-lifetime opportunity technology presents to us to create a greater and more inclusive society for us all. As a leader, we have a responsibility to add our voice to this important discussion and is one of the reasons why in this past fiscal year we took the opportunity to reflect on our progress with our first global diversity and inclusion report

Beyond that, we also have a duty to operate a globally sustainable business.  From innovative packaging solutions using bamboo and sugar cane to releasing our first products made from closed-loop post-consumer recycled content. Equally, we need to not only inspire future generations about technology, but give them access and opportunity so they can thrive in a digital world – something we do through our Lenovo Foundation.   

Lastly it is about trust. The most important measure of our success.  Trust in who we are as a company, how we do business, our transparency, how sustainable we are, our security and supply chain, our leaders, the quality of our products and so much more.  Millions of customers small and large in every corner of the world put their trust in us every day and it is why I believe we are one of FORTUNE’s Most Admired Companies and why Thomson Reuters ranked as one of the Top 100 Global Tech Leaders.

As I look ahead to the next decade for Lenovo it will be our business success coupled with the responsibility we have as an industry leader and global business that drives our mission.  A mission to deliver smarter technology for all so that we can play our part in building an inclusive, trustworthy and sustainable digital society – for everyone, everywhere. 

Read our full annual report here.

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