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Lenovo Founder Losing Confidence In CEO Yang Yuanqing

Lenovo founder Liu Chuanzhi has hinted that he's losing confidence in the Chinese PC giant's CEO, Yang Yuanqing, saying he doesn't 'resolutely support' Yang.

Lenovo founder Liu Chuanzhi has hinted that he's losing confidence in the Chinese PC giant's CEO, Yang Yuanqing, saying he doesn't "resolutely support" Yang.

Liu made the comments recently at a conference of Chinese industry leaders in Beijing, according to a Seeking Alpha report in which they were translated.

Stateside, Lenovo partners were unmoved by Liu's lack of confidence, saying they feel they'll be successful as long as they manage to focus on their customers.

[Related: Lenovo's Counting On Hyper-Converged To Drive Growth, Beat Competitors]

"You just do what you do best, and do it with customer satisfaction in mind," said Joe Lore, sales manager at Woburn, Mass.-based Lenovo partner Sunnytech. "You do not have to be all things to all people."

By revenue, Lenovo was the fourth-largest worldwide server vendor in the third quarter, behind HP, Dell and IBM, according to research firm Gartner. During the quarter, the company pulled in about $1.1 billion in server revenue, a 545 percent year-over-year increase thanks to the acquisition of IBM's System x business last year.

In November, Lenovo reported a $714 million second-quarter loss as a result of its ongoing restructuring, which includes integrating the System x business and the reorganization of the Motorola Mobility business, also acquired last year.

Those challenges came along with a PC market slowdown that Liu argues is a significant hurdle for Yang, according to the Seeking Alpha report, which noted that Yang could be forced out in the next year if the company’s performance doesn’t improve.

"Yang Yuanqing's team needs to go forward, it needs to take more risks," Liu said, according to the translation. "If there's no other rice bowl, then I don't dare say I'll resolutely support Yang, because you need to have a rice bowl to eat from in order to live. When there's a new rice bowl, then there will be strength to support their breakthroughs."

While Liu may be arguing that Lenovo needs more product lines in order to remain competitive, the company has taken an aggressive stance in the U.S., regularly claiming that it intends to become the lowest-cost provider of enterprise hardware in the market.

In recent months, the company has inked deals with hyper-converged infrastructure darlings Nutanix and SimpliVity, and has been recruiting more partners and updating its rebates and incentives to allow partners to get even more aggressive on price.

"If you do what you do better than anyone else, you'll have all the money to purchase as many rice bowls as you want," Lore said.

Lenovo did not provide comment for this story before publication time.

PUBLISHED DEC. 9, 2015

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