Lenovo data centers, coding unit to expand

Lenovo Group Ltd is expanding its data center business and software and services unit this year as the Chinese tech giant looks to cope with the COVID-19 challenges and opportunities, company officials said on Tuesday.

The move comes after the world's largest personal computer maker restarted production in all of its factories in China, including its gigantic plant in hard-hit Wuhan, capital of Hubei province.

Yang Yuanqing, chairman and CEO of Lenovo, said on Tuesday the company will work hard to transform itself into a competitive service and solutions provider.

"The outbreak will no doubt increase global uncertainties but we will try our best to find new opportunities from the online economy."

According to him, as people stay at home for work and study, the demand for PCs, tablets and displays will increase. The growing demand for mobile games, remote consultations and video conferencing tools also provide tons of opportunities.

"Lenovo has a full product lineup, and good relations with software providers, which can help us become a one-stop supplier to meet the demand," Yang said.

The company aims to maintain its position as the leading computer maker, and to expand its presence in the internet of things era.

China recently placed greater importance on constructing new infrastructure including data centers, 5G and artificial intelligence, which Lenovo said are in line with its business strategy.

"We expect our data center business to grow by over 20 percentage points on a yearly basis than the industry average for the full year," Yang said.

Though the pandemic has affected the company's production in the first quarter, currently, all of its factories are churning out devices at full capacity in China.

Its Wuhan factory restarted production in March and has returned to 100 percent of its production capacity, with about 10,000 employees at the assembly lines.

Qi Yue, who is in charge of the Wuhan plant at Lenovo, said as the demand for PCs rises, the factory's orders have been running on to May.

The Wuhan factory is the biggest and most advanced plant for Lenovo. About 95 percent of the products from the factory are shipped to more than 160 countries and regions, Lenovo said.

According to market research company NPD Group, demand for PCs and keyboards rose as the outbreak forced more people to work from home and many consumers got subsidies from their employers to purchase the devices.

Jitesh Ubrani, research manager for market research company International Data Corp's mobile device segment, said: "The surge in demand may be short-lived as many fear the worst is yet to come and this could lead to both consumers and businesses tightening spending in the coming months."

During the first quarter of this year, Lenovo maintained its leading position despite posting a 4.3-percent year-on-year decline in shipments, due to the outbreak impact on supply chain. Excluding the Asia-Pacific region and Japan, Lenovo managed to grow across all the other regions, thanks to increased demand due to the new work from home policies, IDC said.