Lenovo Group Ltd on Tuesday announced a plan to restructure and focus on business in China, as the company's home market has great growth potential and has become a bellwether for global technology trends.
Lenovo Chairman Yang Yuanqing declared on Weibo, a Chinese social network, that Lenovo's China business will be reorganized into two divisions — a consumer-focused division of PC and smart devices (PCSD) and a data center group.
Liu Jun, who previously worked for Lenovo's mobile business group and led its acquisition of smartphone company Motorola Mobility from Google in 2014, will return to head PCSD, according to Yang.
Lenovo's restructuring in China and Liu's return are evidence that the company attaches great importance to the home market, Yang suggested in an email to employees, which was leaked on Tuesday.
"The PC industry is changing. And China has the fastest-changing smart devices market, and global innovation center is shifting to China, where there is great growth potential and opportunities," said Yang.
"China is our incubator for new products. In order to take advantage of the new opportunities brought by changes in our industry, we are restructuring," Yang added.
Lenovo has recently been overtaken in global PC sales for the first time in four years by Hewlett-Packard, IDC data showed.
The company posted in February a 67 percent slide in third-quarter net profit. After the fall, improving performance in China was crucial, said Yang.
It is China rather than western markets that is the current indicator of the global PC market, Fang Dongxing, founder of market consultancy ChinaLabs, said. "If a product cannot perform well in China, it will perform badly internationally."
