Yao Yingjia claims his favorite Lenovo-designed computer is the 7-year-old Tianxi model. But Yao, general manager of Lenovo Group's Innovation Design Center in Beijing, uses an IBM Thinkpad X Series Tablet laptop.
He describes the computer as ``very useful'' for his work because of the tablet function. In response to critics' acceptance of the Lenovo Thinkpad brand, which Lenovo acquired with the 2004 purchase of IBM's personal computing unit, he remarks, ``The brand is very successful. The design is good and Thinkpad has led its markets segment for 20 years.''
The Tianxi remains Yao's favorite because it represents the development of a new business model for Lenovo, a key to making the company a global player in the consumer PC market.
Released in 1998 after two years of research and development, the computer established Lenovo as the leader in the home PC market in China with its pastel-colored, shell-shaped central processing unit, a USB hub with seven ports under the screen, and the Lenovo keyboard dial for faster Internet connection. Lenovo coupled the design and hardware innovations with a co-branding package involving one year of free Internet service from China Telecom upon purchase of the Tianxi.
At the time, computers were just becoming commonplace in homes in China's major cities. The business model of melding consumer tastes for design, supporting the design with innovative technology and rounding off the package with culturally savvy marketing, made Lenovo the unabashed leader in China's PC market.
The company's newest models follow a similar business strategy. On Nov. 29, Lenovo released a sexy, red laptop, the Tianyi F20, in Hong Kong. The Tianyi F20 supports a three-cell battery and a six-cell battery solving one of laptop users' top worries, battery life. The six-cell battery attaches to the back of the computer making the product tilt forward slightly for more comfortable typing position. The Tianyi recently won Germany's iF product design award for 2006.
Andy Switky, managing director of Shanghai operations for Palo Alto, Calif.-based product design and development firm IDEO, said, ``Lenovo is one of a handful of companies [in China] that seem to be getting it right.''
Design is one-third of the equation
In a Nov. 30 interview at his office in Beijing, Yao explained that design plays an important role in Lenovo's success, but it is difficult to assess the value in numbers.
``Let me give you an example: In the week after the Tianxi was released, Lenovo's shares on the Hong Kong market doubled, but design is only part of it. There is also speed to market and technology, which are important. Design makes up one-third,'' he said. ``Design is part of Lenovo's success because it attracts customers.''
Yao is not a designer who worries about every design's effect on the company's stock price. Clearly, the entire design process is his primary focus. This starts with ``material as a road map,'' and also involves communicating with the design team, researching user needs, and making the first molds in the Lenovo Innovation Design Center's labs in Beijing. The first floor of the three-story center is dedicated to materials. Brainstorming occurs in a room with three full walls of materials, ranging from children's toys and bits of cloth to high-grade plastics used for computer casings.
``We say this room is half dream and half reality,'' said Yao. He explains that the lead designer may have an innovative idea for material use, but the engineer may find the suggested material impractical and veto the designer's choice.
Lenovo, which was known as Legend Computer Co. Ltd. up until early 2004, uses GE Plastics as its main supplier for plastic materials. Another lab holds a room of color chips from GE Plastics and other suppliers, as well as Lenovo's own designs. Across the corridor, two engineers sit, one creating colors and the other handling plastic chips made to order according to the designer's color and texture specifications.
``Materials are a small part of the cost of the total product,'' he noted, ``although it depends on the product; some materials are expensive. But the material is very important because it is what people first see.''
In the simulation lab, designers use a three-dimensional pressing machine to test a product's usability. ``The designer can stamp out an exact copy of his design to test the quality,'' said Yao. ``Sometimes they change the design nine or 10 times in one day.''
Lenovo's designers can produce samples of their designs within a couple of hours, and tens of samples in one day with soft molds. Yao said a typical first product run begins with 10-15 sample products made from a soft mold.
Time to market and intellectual property are important in any market, and even more sensitive in China where leaks of products, even at the design stage, are common. Lenovo protects IP rights and shortens its time to market by housing two injection molding machines in the design center. The molds used have a life of about one-third of a normal mold, but Lenovo claims it can get a new design on the market in a few weeks.
``We can quickly push 2,000-3,000 units onto the market. It's important to get a new product out before the competitor,'' Yao said.
Domestic design a growing prospect
Yao was among the presenters at the Dec. 1-2 ``Design for the New China Markets Conference'' in Beijing, organized by the Illinois Institute of Technology's Institute of Design. Many speakers at the event mentioned the lack of understanding about design on the part of China's current generation of entrepreneurs. Yao and others commented that many senior executives do not understand the value of a good, user-friendly design to the financial success of a product. Their eyes are on the cost of total production, so inexpensive materials and off-the-cuff design has been the norm.
But perspectives are changing at a number of companies, according to IDEO's Switky.
He said that the Chinese companies stepping onto the international design stage, such as Lenovo, Haier Group and TCL, are all manufacturers. ``But,'' he said, ``from an IDEO point of view these are all simply companies that have done a good job of building brands - and happen to be manufacturing companies.''
Yao said: ``Many executives will say, OK, design an MP3 player, and expect a drawing back in a couple of hours. That's not right!''
Yao sees the designer as an engine of the company, giving vision to the company's business strategy. When Lenovo designers decide to design an MP3 player, he said they might think of designing a ``music partner,'' not just ``design an MP3.''
The emergence of global character
For years, Lenovo has had a reputation as one of the Chinese companies to watch in the global computer market. Lenovo made use of the attention to research international markets. In terms of design and materials, multinationals such as GE Plastics and Nike, and well-known design firms such as IDEO and Portland, Ore.-based Ziba Design Inc. all have worked with Lenovo.
Yao believes that design teams must communicate and have exchanges ``with many teams - design consultants, fashion industry, materials companies. The exchange of experiences with other designers is important: to see their team spirit, experience, and vision. These exchanges inspire our team to think of more good ideas,'' he said.
The attention to design and user needs put Lenovo in the spotlight globally. At the recent Beijing design conference, Jan Stael von Holstein, co-chairman of London-based branding consultancy Network With a Silver Lining and founding member of Unimark International, offered some independent research findings. He cited unnamed studies of U.S. consumers that ranked Lenovo seventh in a list of top Chinese brands recognized by U.S. consumers, and tops among Chinese brands likely to be global in 10 years - ahead of Haier Group and Bank of China.
Despite the status as an up-and-coming computer maker, the announcement of Lenovo bidding to buy IBM's personal computer business attracted skeptics. Chinese manufacturers' reputations for providing cheap products and copies appeared to be difficult to shake, and the targeted business users one of the more difficult groups of customers to win over. Since June, PC World magazine and major online portals such as Engadgets.com have given positive reviews to Lenovo's new X and Z model Thinkpads.
Yao said, ``A brand will change, but slowly. The [Thinkpad] brand is very successful and the design is good ... We will not change too much, but possibly make it look a bit cooler.''
A more relevant topic to Yao is the merging of IBM and Lenovo, which he said will be ``a new team for the future. The two teams have different experiences and knowledge, but if we can put them together to understand each other, our team will be bigger and stronger.''
What the future holds
Lenovo's vision is to become the leader in the global computer electronics industry. Innovation is a big part of the equation. The short-term plan includes strengthening the brand, creating brand loyalty and respect for the brand, according to Yao.
He sees high-performance and recyclable materials as a large part of his work in the near future. He hints that the team is experimenting with new materials, but said he cannot talk about the plans in detail. He confirms that new material usage could involve plastics with greater protective qualities and flexibility.
``We have people following the development of materials and attending training in the newest materials and they bring new ideas back. The designers also can bring up a result and see if the engineers can make it.''
Another strategic plan involves diversifying the company's product lines into mobile telephones and other consumer electronics. Such a plan can be financially risky, as many Asian companies have discovered, to their dismay. Taiwan's Acer Computer Inc., for example, tried to move into mobile telephones, but lost money and had to spin off the unit, while China's Haier Group attempted unsuccessfully to venture into computers and mobile phones. Still, Yao sees diversification as a question of balance and important to the company's strategy.
``I believe the PC will be undergoing major changes in the next few years, and become more of a communication tool. New products will come out and become part of lifestyle, like a refrigerator or washing machine. Asia and developing countries could embrace these new technologies more easily because in developed countries lifestyle and infrastructure are established, so technology will change more slowly.''
The U.S. and European markets continue to be important to Lenovo. Hence, the company's sponsorship of the 2008 Beijing Olympics, which Yao acknowledges as ``a great marketing opportunity.''
Understanding user patterns and needs persists as Lenovo's strength, however.
``Some car brands are popular worldwide, so computers could be the same. Of course, differences exist in the way people use computers,'' acknowledges Yao. So the company is busy researching user differences between China, the United States and Europe, and particularly the target consumer's tolerance for products made by Lenovo.
Yao, who began his career at Lenovo in 1996 as the company's first designer, said design gets a lot of respect at the company. The firm has increased its Beijing-based design team from just him nine years ago to 80 now. It has design teams in Shanghai and Shenzhen that focus on other electronics products.
The company took an innovative advertising approach that attracted Yao to the position. He said he looks for designers who like the field and have technical ability, which can prove difficult in a society where many parents still choose their children's major in university. He also assesses potential Lenovo designers on their communications skills.
``Design is a field that requires communication and team work. Listening to others' ideas and talking about them is important. A designer is like water. Water needs to move in order not to stagnate. The same is true of a designer.''
To keep his designers on the move, Yao and his team organize parties, outdoor team-building activities, and contests. The current contest involves designing posters for the 2008 Beijing Olympics. Each designer uses a favorite calligraphy style from one of China's imperial dynasties to design a poster. Yao expects the process to lead to the development of a software/hardware combination for writing Chinese calligraphy. The development of Chinese character fonts has been a long process in the computer industry in Asia. Yao sees this product focusing on a different user segment.
``It will make learning Chinese characters easier for foreigners,'' he predicts.