Lenovo’s innovation lies in its technology, products, business model and cultural management, according to Liu Chuanzhi, founder of the Lenovo Group and president of Legend Holdings Ltd., and Yang Yuanqing, CEO of Lenovo.
International acquisitions fueling global innovation
Referring to Lenovo’s innovation history, people tend to indulge in the story of Lenovo’s buying IBM’s PC business in 2004. “At that time, Lenovo didn’t expect to become the global leader of PC industry”, said Yang Yuanqing with emotions.
To date, Lenovo’s Innovation Triangle Teams in the USA, Japan, and China collaborate have been fusing together different cultures of different countries and collaborating in a 24-hour non-stop manner to ensure leading position of Lenovo’s innovation in the world.
After successfully absorbing IBM’s PC business, Lenovo’s international acquisitions have been unstoppable. Lenovo’s international mergers, from single business like PC and server to comprehensive business like cloud computing, serve not only as effective strategies for Lenovo to strengthen its operation volume and optimize market distribution, but also a way for Lenovo to bring in talented people from different fields and fill its innovation teams with new blood.
At present, Lenovo owns about 11,000 patents globally, about 2/3 of them coming from China and 1/3 from oversea teams. According to Zhang Dekui, director of Lenovo’s Innovation division, Lenovo spends USD500 million on R&D every year, and has 5,000 product developers, including engineers, researchers, and designers, and more than 100 advanced labs around the globe. These constitute Lenovo’s unique innovation and quality guarantee system.
Complete industry chain supporting innovations on multiple levels
Liu Chuanzhi has said that “Lenovo’s first innovation is to combine technology with the high-tech industry”. In 2012, when sales of Lenovo’s PCs were thriving across the world, Lenovo keenly grasped the new trend of the mobile internet and started its PC+ strategy, beginning to increase investment in mobile internet terminals like smartphones, tablet computers, and smart TVs in the meantime of consolidating its advantages in the PC industry.
Today, the fall of some traditional PC manufacturers and the achievement of Lenovo in the PC+ area have proved that Lenovo has made a right decision. In the Q2 of the 2013 fiscal year, the global market share of Lenovo’s smartphone increased to 5.1 percent, behind only Apple and Samsung, and the growth of its tablet computers was even higher. Also, sales of Lenovo’s tablet computer and smartphones had exceeded that of its PCs for two quarters in a row, their revenue accounting for 15 percent of total revenue of the company and profit margin steadily on the rise.
In Lenovo’s Innovation Center, Lenovo’s employees, from system design engineer to software application researcher, from part technology R&D director to product design director, demonstrated Lenovo’s innovation industry chain to the reporter. Lenovo has set up technologies in four major fields to bolster the entire Lenovo business innovation endeavor, including part technology and system innovation, natural interaction technology, cloud service and big data technology, and new materials and design innovation. These make up Lenovo’s core R&D innovation strategy, dubbed “one cloud and multiple screens”, and they are also the source of Lenovo’s business innovation.
Independent manufacture and protection of innovation achievements
In October 2013, Lenovo’s industry base in Wuhan was completed and put into operation. This is a comprehensive industry base that integrates R&D, production, and sales of mobile internet terminals, with a total investment of more than RMB5 billion Yuan. “In this base, a product will need to go through dozens of labs before it is finally put onto the market, and it will be examined and checked repeatedly during production. This is the advantage of independent production and development. It can protect our innovations”, said Yang Yuanqing.
There used to be doubt that Lenovo was a computer assembler and not a core technology innovator. For this, in 2011 Lenovo began to shift its focus onto parts and components, striving to achieve breakthroughs in component technologies and walk ahead of competitors in terms of system innovation. This requires Lenovo to attach more importance to working with upstream manufacturers, extensively consolidate upstream and downstream technologies, and provide parts for system innovation. Lenovo’s independent manufacturing enables it to communicate directly with upstream manufacturers, which would increase its leverage for innovation.
10 years ago, Lenovo introduced a relation-type business model that targeted at corporate customers and government customers, to go along with its consumption business model that targeted consumers. That was a business model innovation. Now, Lenovo again introduced a new-era dual business models, with one online model and one offline model, and its marketing campaign is moving from traditional advertising to internet marketing, digital marketing, and micro-blogging marketing, etc.
In 2012, Lenovo added “Pioneer” to its 4P corporate culture, showing its intention to be a pioneer of the time. Internally, Lenovo has its unique innovation mechanism, including CEO innovation discussion, ideas management, etc, so as to promote the realization of technology and product R&D.
For being the first to bring electric to public transportation. The ever-innovative Chinese automobile company created the world’s first purely electric bus.
BYD’s e-BUS 12 releases zero emissions, can go for more than 150 miles on a single charge, and uses solar panels located on the roof to convert solar energy into electricity. The buses have been tested in China, Southeast Asia, and Europe; Hertz car rentals will use the buses to transport passengers at LAX.
BYD Electric Bus for U.S. consumer market
Chinese electric vehicle maker BYD has its eye on the U.S. consumer market, even though it’s focused on fleets for the time being. “We want to sell cars to consumers in the U.S. in the next several years,” BYD senior vice president Stella Li told reporters yesterday. BYD could localize production of passenger cars here in about 10 years, she said.
Li was in Lancaster, a desert city about 70 miles north of Los Angeles, where BYD just opened a production plant. The plant will initially produce electric buses, starting in October. BYD aims to turn out 50 units in the first year. The plant will have an annual capacity of 1,000 units, said Li.
“The is the first time a Chinese bus company is opening a manufacturing plant in the U.S. and the first North and South America plant for BYD,” Li told a gathering that included officials from Lancaster, Los Angeles County, the state of California, and several municipal transit companies.
BYD already has a contract with the Long Beach Transit for 10 ebuses, which will be in service in the first half of 2014, Long Beach Transit spokesman Kevin Lee told PluginCars.com. Stanford University has also placed on order for three ebuses, said BYD fleet sales manager Joel Reikes.
Made in U.S.A., By a Chinese Company
BYD has plants that assemble buses from imported parts—known as knock-down assembly—in numerous other countries, including Egypt and Bulgaria. Though some of the parts for the plant in Lancaster will be imported from China, Long Beach Transit used federal funds to buy the BYD buses, and one of the funding conditions is that the BYD ebuses must have at least 60 percent U.S.-produced content.
That isn’t a problem, said Li. The buses will have more than 70 percent local content, she said, and that is before considering the inductive chargers that will be used in Long Beach. If they are included, “It is close to 80 percent,” said Li. Those chargers are from Wave Inc., a Utah startup, and are considered part of the local content, said John Inglish, a Wave director, in an interview with PluginCars.com. It will install two chargers in Long Beach.
Among additional local content, the batteries for the ebuses will be assembled at a nearby plant using imported cells. And, the multiplex electronic control is sourced from I/O Controls Corp. in Azusa, Calif., Michael Kuang, vice president of engineering at I/O Controls, told PluginCars.com
- Dutch Island to Become First Area in Europe Where Public Transport has Been Completely Electrified Thanks to BYD (elonmusktesla.wordpress.com)
- Buquebus, CTS Auto launch BYD Electric Bus in Uruguay (transportsustainability.cleantechnology-business-review.com)
- BYD to begin making electric buses in California, delivers 6 electric buses in the Netherlands (greencarcongress.com)
- China’s BYD Builds Buses In The USA (gas2.org)
- BYD may supply VW with batteries for plug-ins (reviews.cnet.com)
A company in expansion
The story of American instant messaging is one of fragmentation: AOL lost its grip, Gmail and Facebook gained ground, that was that. But in China, IM portal Tencent dominates. It has expanded to games, social networking, apps, and an open platform to encourage a Western-style app ecosystem. It’s now pushing West, entering Apple’s App Store and buying California-based Riot Games. It makes $1 billion a quarter, much of it through virtual-goods sales, and is now the world’s third-largest publicly traded Internet company. Jealous yet, AOL?
8th most innovative company
Tencent, Chinese company from Shenzhen, is the 8th most innovative company, scored by the FastCompany in 2012. Founded in November, 1998, Tencent has grown into one of China’s largest and most used Internet service portal. Since its establishment over the last decade, Tencent has maintained steady growth under its user-oriented operating strategies.
Presently, Tencent is providing value-added Internet, mobile and telecom services and online advertising under the strategic goal of providing users with “one-stop online lifestyle services”. Tencent’s leading Internet platforms in China – QQ (QQ Instant Messenger), QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai and Tenpay – have brought together China’s largest Internet community, to meet the various needs of Internet users including communication, information, entertainment, e-commerce and others.
Copycat in gaming?
Now, even a die-hard Tencent fan might question why releasing China remakes of years-old franchises really qualifies as innovative, and China’s gaming community has been debating Tencent’s innovative tendencies — or lack thereof — ever since. The debate is the subject of Netease Games’ latest Dispute feature, which means that before we go any further I have to remind you: Netease competes with Tencent in the gaming space, so the Netease games editorial staff isn’t really coming from a position of neutrality here. But many gamers really do see Tencent as a copycat; when I searched for relevant posts on Weibo one of the first ones I found was about Tencent copying animation and sounds from the Japanese anime show Naruto for a QQ game.
In Dispute’s usual dueling essays format, Chinese gaming journalist Chang Kong defended Tencent as being innovative, saying that the company really did deserve the title for having brought together 300 million gamers. Chang’s opponent, an anonymous marketing strategist in the games industry, disagreed, arguing that most of Tencent’s own games were highly derivative, and pointing out that its most successful games were virtually all developed by other companies with Tencent merely serving as the publisher.
Most innovative social media company
China’s Tencent is the world’s most innovative social media company, ahead of Pinterest and Buzzfeed, according to Fast Company. Tencent gets the nod largely because the success of its WeChat suite of communications apps which have attracted 3 million Chinese users. “Tencent’s aggressive international rollout – rare for a Chinese company – has added millions of expats who can now communicate with folks back home, increasing its popularity. In America, WeChat is a top 20 free social networking app in Apple’s App Store,” says Fast Company.