With PC's now in "protect" mode, the "attack" part of Lenovo (LNVGY.PK) CEO Yang Yuanqing's "Protect and Attack" strategy has shifted to tablets and smartphones. Yang has reorganized the company to address "attack markets" head-on, and believes even gorillas Apple (AAPL) and Samsung (SSNLF.PK, SSNGY.OB) aren't invincible.
"We know the playbook; we've done it on PCs," says Gerry Smith who has seen it up close as a former Dell exec, and now heads Lenovo's Americas group. "We can attack on scale. We'll attack on cost efficiency and speed. We can attack these guys from the bottom, and put a lot of pressure on them from a product portfolio, pricing, time-to-market perspective."
Lenovo produced 11.4M smartphones and 1.5M tablets in FQ1, a triple and a quadruple, respectively, from a year earlier. The company this week launched a new flagship premium phone, the Vibe X, and plans a number of other new products before year's end.
"What P/E would investors pay for a 'Chinese Apple,'" asks bullish portfolio manager James Weir. He notes the company continues to gain market share in flat PC markets, but the potential for "rerating" is in mobile. "If Lenovo can keep growing this, they can earn the right to be rated with Apple and Samsung as a sexy consumer electronics player, not just a PC box seller."
SA Pro's Stephen Simpson is of a similar mind about Lenovo's opportunity in mobile.