This American wants you to buy Chinese
(FORTUNE Magazine) - Bill Amelio, CEO of Lenovo
When Lenovo purchased IBM's PC division in 2005, the $1.75 billion deal grabbed the world's attention. The acquisition put Lenovo on the map, making it the third-largest PC company in the world.
A year later Bill Amelio, 48, who previously ran Dell (Research) in Asia, leads the $13 billion company. And Lenovo (Research), which splits its headquarters between Beijing and North Carolina, is dropping the IBM (Research) name from its products.
FORTUNE's David Kirkpatrick caught up with Amelio, on his cell phone, at the Singapore airport to talk about the company's national loyalties, its competition with Dell, and his 9,800-mile commute.
How is Lenovo doing?
Well, 12 months ago few people outside China knew Lenovo, and now we've made a big splash.
Is it wrong to think of Lenovo as a Chinese company?
Yes. We have roots both in China and in the West. We have a Chinese chairman and an American CEO. In every country our country leader is a local. We do our R&D on notebooks in Yamato, Japan. How much more global do you want?
Is being perceived as a Chinese firm a disadvantage?
It actually makes some customers want a tighter engagement with us. We've got commanding share in China, with 5,000 touch points across the country. We're growing dramatically and are highly profitable. People want to be part of the bandwagon. We get them hooked up with movers and shakers in China.
"Touch points?" Do you mean retail stores?
Yeah, mostly in the big PC malls. In a mall in a big city you might run into seven different Lenovo storefronts. There may be two or three on a floor.
Will you manufacture everything in China?
For notebooks it's definitely in China, but for desktops we'll do final assembly close to the customer. You don't want to stick them on a boat, because a PC's value drops each week anywhere from half-a-percent to a percent and a half.
Can you compete with Dell on cost?
Our model in China is as efficient as any in the PC industry. When somebody out in the hinterlands buys something, it instantly registers in Beijing. We know the exact inventory at all 5,000 stores. But Dell's worldwide supply chain is renowned. I'm personally spending a lot of time to help us become world class in our supply chain outside of China.
Your family still lives in Singapore, where you were based for Dell, right?
From the May 29, 2006 issue