Feeds

Lenovo aims to seize PC crown within 3 years

Acer and Dell heads already scalped, HP is next target

Intelligent flash storage arrays

Lenovo is aiming to become the biggest shifter of PC tin on the planet within three years after recently swiping the number two spot from Dell.

The once sleeping dragon is clearly wide awake – Lenovo outpaced worldwide market growth for the last eight consecutive quarters – and in a bullish mood.

"We should be able to overtake HP in three years," Milko van Duijl, senior veep for mature markets at Lenovo told El Reg. "Look at our execution".

It has taken the giant nearly seven years since buying IBM PC biz to mount a serious challenge to rivals with the work behind the scenes including an overhaul of its supply chain, sorting out channel conflict and paying reseller richer rebates.

In Q3 Lenovo grew 25.5 per cent worldwide to take 13.5 per cent market share, while its next target HP grew 5.3 per cent to give it a 17.3 per cent share.

Expansion in part came from the joint venture with NEC in Japan, but Lenovo has also forked out for German PC maker Medion, which will shore up its footing in the European arena.

Van Duijl is drawing upon past mistakes to ensure the integration runs more smoothly. "When Lenovo acquired IBM we lost 25 per cent of revenues in the first year. Our challenge is to not let that happen with Medion," he said.

Further acquisitions are on the radar, but Van Duijl is giving away very few hints about the next target – though it is unlikely to be HP's $40bn PC biz.

"We have progressed but there is more runway ahead. We will continue to look out for acquisition candidates. If the price and culture suit, we have the cash."

Though Lenovo rules out making non-PC related acquisitions in the system integration space that "competes with partners' services operation".

Market dynamics suit Lenovo at present, in the mature market at least, as consumers - where the firm is a little known entity – are not spending while the enterprise refresh is expected to continue for another "two to four quarters".

Van Duijl says its major challenge is "consumer confidence" with the economy balanced finely amid predictions of a double dip recession.

But the firm is investing in a brand building campaign in mature retail markets to improve recognition when household finances do improve.

"We are starting to do that in the UK – TV, print and online – to penetrate retailers and get more shelf space. Consumer confidence and efforts to grow in consumer are the biggest challenges facing us now," he told The Reg.

He says HP is playing into Lenovo's hands with the continuing PSG saga and added that Acer's well-documented stocking issues have highlighted the inherent weaknesses of an over-reliance on a market segment.

"A lot of large customers that were single source or at the end of a contract [with HP] ... we've seen an increase in wins among those customers. The crunch time for HP will be at the end of October when it decides if it is in or out of the PC business," said van Duijl.

"Acer suffered from the fact that it was pretty dependent on consumers and had a lot of stock in the channel, and that will come back to bite you in the tail."

Gartner reckons successful PC vendors of the future will have to tap into demand for non-PC devices. Lenovo has a Android-based consumer and ThinkPad fondleslab and it says a Window 8 version will arrive late next year.

As for smartphones, the Lenovo man says: "We are in the smartphone market in China but won't go worldwide yet. We have to build our brand strategy or we'll just be another name in the phone business". ®

Choosing a cloud hosting partner with confidence

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Choosing a cloud hosting partner with confidence
Download Choosing a Cloud Hosting Provider with Confidence to learn more about cloud computing - the new opportunities and new security challenges.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.