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Lenovo Keeps Heat On

Naming a Dell exec to its top spot highlights the growing competition in Asia.

The battle for the prized Asian PC market got a little fiercer on Tuesday when

Lenovo Group

announced it had poached its new CEO from the executive suites at


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Lenovo, the world's third-largest PC maker after acquiring


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PC business in May, said CEO Stephen Ward would be stepping down. In his place, the company has hired William Amelio, head of Dell's Asia Pacific division.

With its integration of IBM's business now largely complete, the change of leadership will allow Lenovo to move to the next phase of growth, the company said. Amelio will "lead Lenovo from the important stability we have achieved in the first phase of our integration to the profitable growth and efficiency improvement to which we are committed in our next phase," Lenovo Chairman Yang Yuangqing said in a statement.

At the same time, the move underscores just how intense the competition for the Asia-Pacific market has become among PC makers. With the PC market showing signs of maturing, companies are looking East for growth.

"Everybody's chasing Asia Pacific right now," says Moors & Cabot analyst Cindy Shaw. While Lenovo's roots as a Chinese company give it some degree of a home-field advantage in the region, the opportunity is much larger than China, including places like India. And executives who know the region and have familiarity with running U.S. business are not easy to come by.

In Amelio, Lenovo has acquired a PC veteran. In addition to his most recent stint at Dell, Amelio spent 18 years at IBM, at one point managing worldwide operations for IBM's PC division. "You've got a guy who knows IBM's PC business and knows Asia-Pacific and knows the competition," says Shaw.

As the big PC makers vie for the Asian market, the competition is only likely to get fiercer, says Sam Bhavani, principal analyst of mobile electronics and computing at the industry research firm Current Analysis. PC penetration in the U.S. is very high, says Bhavani. "But if you look at emerging nations, by and large the PC penetration in those regions is much less than it is in the U.S. That's where growth comes from."

For Dell, which has set an aggressive target of reaching $80 billion in annual revenue in the next few years, the Asian-Pacific market is especially crucial.

But the company has encountered its share of challenges there. In October, Foo Piau Phang, the head of Dell's China operations, resigned. And some analysts have questioned how well suited Dell's direct sales model is to Chinese consumers, who may prefer to get a hands-on experience at retail outlets before purchasing a computer.

In a call with analysts following its financial earnings report in November, Dell CEO Kevin Rollins praised the company's performance in China, noting that Dell is the largest non-Chinese company in the country and pointing to Dell's 46% year-over-year unit growth in China in the third quarter.

"Overall, that's a winner market for us. We're thrilled with it, and we're going to continue to pursue it," said Rollins, emphasizing that Dell would do so through the direct channel rather than through retail channels.