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Lenovo stock: The channel iceberg is melting

Frosty PC demand not helping as post-XP order glut clogs distie warehouses

Until recently, dusty Lenovo PCs were looking a likely candidate to replace concrete in the British construction sector, such was the inventory glut confronting local ops. Things have improved, but still aren’t great.

The company has already written down Windows 8.1 stock across Europe in July, Lenovo EMEA president Eric Cador previously confirmed to us.

El Chan understands the PC maker did some deals with Tech Data’s Brit operation in that month and in August, heavily discounting PCs for direct-marketing resellers.

However, according to some estimates, other Lenovo distributors are still feeling the squeeze. Ingram Micro, for example, is understood to have £7m of aging Lenovo PCs and about £15m in total.

“Ingram has refused to place any new orders until the current stock is cleared to a certain level,” claimed a well-placed senior source. “Lenovo is as serious as a heart attack about clearing stock.”

Exertis is also understood to be carrying way more Lenovo kit than it would like, and also seems to have issues with Dell and Acer stock profiles.

All of this potentially means some further discounts translating into cheaper prices for trade customers and end users, sources have predicted.

Another Lenovo insider told us the stock issue is the number-one priority being tackled by newly appointed UK boss Dave McQuarrie and channel head Andy Bass.

“They have taken on a problem inherited from their predecessors,” said one contact.

Ironically, former UK lead Marc Godin left in the early summer to manage the EMEA supply chain, and is charged with making it fit for purpose for Lenovo’s expanded enterprise division.

The PC market grew in the first nine months of last year, partly based on Microsoft ending support for Windows XP and a wider replacement cycle.

Vendors got carried away with this and continued to write bullish forecasts until Q4, when sales crashed.

But shipments of computers bound for the market in Q1 were ordered in October and already on the way by ship when vendors realised the extent of the downturn.

The stock profile has continued to build, and Lenovo is by no means alone, but is most acutely affected.

Bass told us he is working through the stock issues: "There are some short-term opportunities for customers to upgrade to ThinkPad."

He added: "I guess it is no secret that we've got some inventory challenges. I am in the detail of it, trying to work through it, but it varies by series, by SKU and by channel."

Ingram Micro told us it does not discuss individual vendors. ®

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