Lenovo's laser focus

The China-based vendor aims to zap its competitors by focusing solely on PCs, reports Doug Woodburn

Lenovo claims it has a winning pitch as it looks to recruit partners that can help it dislodge HP as the world's largest PC vendor: it is the only one focused solely on PCs.

After ousting Dell from second spot in Q3 on the back of a 25 per cent shipment spike, the China-based vendor now has its sights set on the market leader.

Darren Phelps, channel director for the UK and Ireland, said Lenovo harbours clear ambitions to grow aggressively in the UK, where it stands just fifth in the pecking order with 7.8 per cent market share.

"For the UK, clearly our aspirational goal is to be number one," he said. "In the short term, we want to get to 10 per cent across all business units within the next one to two years."

Lenovo has about 390 UK managed partners, up by 20 per cent year on year. Eighteen of these sit in the Premium Gold tier, which has a revenue gate of $1m (£627,000), with the remainder required to sell more than $150,000 annually. In total, 1,300 UK partners transact with the vendor every quarter.

Phelps said developing new partners is a priority, stressing that Lenovo now has five staff focused on partner acquisition. The vendor also recently launched a loyalty scheme offering instant rebates for non-managed partners.

HP's and Acer's PC market woes have been well documented this year, while the likes of Fujitsu and Dell offer a wide array of hardware and services.

Phelps said Lenovo had a simple message to resellers that had become disillusioned with their current vendor.

"There is a compelling reason to switch," he said. "There is no confusion in what we do. We are a product company, we make PCs, we have been committed to it for a long time and are committed going forward. All our messaging is about how we dedicate our support and innovation to drive the product and that is what the reseller wants.

"We know we have the right product for the SMB space with Edge and we can easily go up the chain and also offer a consumer product. Other vendors have not had that stake in the ground and that has reinforced our message."

Such is Lenovo's commitment to the traditional PC space, Phelps was reluctant to lay out any grand ambitions for the tablet and ultra-book market. He was also tight-lipped on when Lenovo would launch its first tablet device based on Windows 8.

"We do not see the tablet as a replacement - not even for ultra-portable devices - but as a companion device," Phelps said. "We are committed to the traditional PC space and we see that growing."

Lenovo will also "re-energise" its server proposition in January, he added.

"We believe we now have the right offering and we are ready," he said. "Maybe we were not competitive enough a year back but now we are, and we also now have someone focused on servers in the UK."

Eszter Morvay, research manager at IDC, said Lenovo had a realistic chance of bagging the global PC top spot in the coming years.

According to Morvay, Lenovo trails only HP and Dell in the UK commercial space but is currently languishing in ninth place in the consumer market. Despite the contribution of recent acquisition

Medion and a new partnership with Dixons, Lenovo accounted for just 60,000 of the 1.4 million consumer units shipped in the third quarter.

"If you look at its position in western Europe and the UK, Lenovo has a long way to go in the consumer space," she said.

"Lenovo is still a small player but with HP and Acer both struggling with large inventories and Dell and Toshiba also struggling, there is a lot of room to grow in consumer and SMB."

Shortage, what shortage?

According to analyst Citigroup, the disruption to the hard drive production schedule caused by the Thai floods could result in a 47 million-unit shortfall over the next two quarters. UK distribution sources fear even some A-brand OEMs could be hit from as early as this month, particularly on consumer and entry-level business PCs.

But Phelps said Lenovo had insulated itself from the crisis.

"Undoubtedly, there will be some constraint at some point, but for what we can see today, we have the supply for the next three quarters for the
channel," he said.

"I have been to see the distributors individually to tell them what we see for the next quarter, and three quarters. Although there will undoubtedly be constraints, we are used to dealing with these situations. Worldwide, our [market] share has allowed us to be very engaged with our vendors. A lot of work has been done by our senior guys to lock down the supply for the coming quarters."

With Lenovo's strategy being driven from China, resellers complain the UK is often at the back of the queue for product launches and initiatives. Phelps denied this is the case, stressing UK partners will get their hands on a new order-tracking system next year.

"It is not live yet but it enables you to provide proof of deliveries and order tracking. Partners can already track the order from start to finish, but the new tool will allow them to do it online," said Phelps. "It will be in real time, so they can do it themselves, rather than coming to us in the UK and then the global supply centre in Bratislava. We will initially give the tool to distributors and then some of the tier-one partners."