Lenovo to seek partners for U.S. growth

Lenovo executive Liu Jun unveils the company's new Android-based television, set for release in China.

Story highlights

  • Lenovo will not go it alone when it releases smartphones and TVs in the U.S., CEO says
  • The company modified the Android mobile software for its TV in China
  • The U.S. expansion will not come immediately, as Lenovo is focusing on PCs
To break out beyond the personal computer market in the U.S., Lenovo Group will need a little help from its friends.
Lenovo has operated as a lone wolf in China, where the company is based, by building hardware that runs its uniquely designed software. At the International Consumer Electronics show this week, Lenovo launched a cloud service in China, similar to Apple's iCloud, that will keep all of its devices in sync.
The company will take a different approach, however, when it expands in the U.S., Lenovo CEO Yang Yuanqing said in an interview here.
"We cannot do everything by ourselves," Yuanqing said. The U.S. market is "more challenging than in China because we have to rely on somebody else's ecosystem. So we have to find the right partner here."
Lenovo expects to continue using Microsoft's Windows on its computers, and Google's Android on its tablets and smartphones, Yuanqing said. Hewlett-Packard and Microsoft may try to court the Chinese electronics giant to help with its U.S. mobile efforts, however.
In the U.S., Lenovo is barely a top-five PC manufacturer, but it's a solid No. 2 globally. Its trio of tablets, which are all based on Android, haven't sold particularly well in the United States.
Lenovo Group has grown significantly in the U.S. in the last few years thanks to its aggressive pricing and the 2005 acquisition of International Business Machines' PC division, which has catapulted Lenovo's sales to corporations.
U.S. retailers have suggested that Lenovo should price its computers $50 below competitors' comparable systems, advice the company has heeded because it hasn't achieved a strong brand in America, Yuanqing said. Pinching pennies delays the U.S. expansion because Lenovo can't accumulate enough profit to fund development in other areas like smartphones or TVs, he said.
"The priority for today is to succeed in the PC area," Yuanqing said. "We have invested a lot in this area, and also we have seen hyper-growth in this area. But we have not made money from the consumer PC area. So we cannot afford to invest more in different, other categories."
At Lenovo's CES news conference, Yuanqing discussed "the four-screen strategy," but in the U.S., it only sells two of those screens.
Lenovo and Sony, which has long been a proponent of selling multiple devices, define the four primary screens in the consumer electronics world as the PC, smartphone, tablet and television.
In the United States, Lenovo only sells computers and tablets. Sony sells all four in many countries and has been deploying software to tie them all seamlessly together.
Lenovo will release its fourth screen, a connected TV set, in China. It has gotten some buzz because its software is based on the latest version of Android, heavily modified by Lenovo's programmers, rather than on Google TV. On Lenovo's platforms, Google does not have the ability to control content in the way it does on a Google TV set, like those made by Samsung, Sony and Vizio.
Before it brings a TV or phone to the United States, Lenovo will focus on improving its brand through PCs, and on building relationships with U.S. cellular carriers and retailers, Yuanqing said.