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Lenovo Group Ltd. is a Chinese multinational technology company with
headquarters in Beijing, China, and Morrisville, North Carolina, United States.1
It designs, develops, manufactures and sells personal computers, tablet
computers, smartphones, workstations, servers, electronic storage devices, IT
management software and smart televisions. In the second quarter of 2013 Lenovo
was the world's largest personal computer vendor by unit sales.4 It markets the
ThinkPad line of notebook computers and the ThinkCentre line of desktops.5
Lenovo has operations in more than 60 countries and sells its products in around
160 countries. Lenovo's principal facilities are in Beijing, Morrisville and
Singapore, with research centers in those locations, as well as Shanghai,
Shenzhen, Xiamen, and Chengdu in China, and Yamato in Kanagawa Prefecture,
Japan. It operates a joint venture with EMC, LenovoEMC, which sells
network-attached storage solutions. It also has a joint venture with NEC, Lenovo
NEC Holdings, which produces personal computers for the Japanese market.
Lenovo was founded in Beijing in 1984 as Legend and was incorporated in Hong
Kong in 1988. Lenovo acquired IBM's personal computer business in 2005 and
agreed to acquire its Intel-based server business in 2014. Lenovo entered the
smartphone market in 2012 and as of 2014 is the largest vendor of smartphones in
Mainland China. In January 2014, Lenovo agreed to acquire the mobile phone
handset maker Motorola Mobility from Google.
Liu founded Lenovo in 1984 with
a group of ten engineers in Beijing with 200,000 yuan. Lenovo officially states
that it was founded on 1 November 1984. Lenovo's incorporation was approved by
the Chinese government on the same day. Jia Xufu, one of the founders of Lenovo,
indicates the first meeting in preparation for starting the company was held on
17 October of the same year. Eleven people, the entirety of the initial staff,
attended. Each of the founders were middle-aged members of the Institute of
Computing Technology, Chinese Academy of Sciences. The 200,000 yuan used as
start-up capital was approved by Zeng Maochao. The name for the company agreed
upon at this meeting was the Chinese Academy of Sciences Computer Technology
Research Institute New Technology Development Company.7
Their first
significant effort, an attempt to import televisions, failed. The group rebuilt
itself within a year by conducting quality checks on computers for new buyers.
Lenovo soon started developing a circuit board that would allow IBM-compatible
personal computers to process Chinese characters. This product was Lenovo's
first major success. Lenovo also tried and failed to market a digital watch. Liu
said, "Our management team often differed on which commercial road to travel.
This led to big discussions, especially between the engineering chief and
myself. He felt that if the quality of the product was good, then it would sell
itself. But I knew this was not true, that marketing and other factors were part
of the eventual success of a product." Lenovo's early difficulties were
compounded by the fact that its staff had little business experience. "We were
mainly scientists and didn't understand the market", Liu said. "We just learned
by trial-and-error, which was very interesting¡ªbut also very dangerous", said
Liu. In 1990, Lenovo started to manufacture and market computers using its own
brand name.8
In May 1988, Lenovo placed its first advertisement seeking
employees. The ad was placed on the front page of the China Youth News. Such ads
were quite rare in China at this time. Out of 500 respondents, 280 were selected
to take a written employment exam. 120 of these candidates were interviewed in
person. Although interviewers initially only had authority to hire 16 people, 58
were given offers. These new hires included 18 people with graduate degrees, 37
with undergraduate degrees, and three students with no university-level
education. Their average age was 26. Yang Yuanqing was among this group.7
Liu
Chuanzhi, received government permission to open a subsidiary in Hong Kong and
was allowed to move there along with five other employees. Liu's father, already
in Hong Kong, furthered his son's ambitions through mentoring and facilitating
loans. Liu moved to Hong Kong in 1988. In order to save money during this
period, Liu and his co-workers walked instead of taking public transportation.
In order to keep up appearances they rented hotel rooms for meetings.
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