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How Lenovo became number one in PC sales

How Lenovo became number one in PC sales

PC vendor shares its insight into how it took the top spot in PC shipments this year

After consistently nipping at the heels of PC market leader HP, Lenovo finally managed to grab the top spot in PC sales last month.

Lenovo spent 2012 in second place with HP showing no signs of ceding its leadership position, but Lenovo Asia Pacific spokesperson, Derrick Koh, said several factors converged in the middle of this year to push the vendor of ThinkPad products into the top spot.

“The main factors were a combination of a clear strategy, strong branding, innovative products, robust channel partnerships, commitment to execution and being part of a diverse global team,” he said.

The PC market, facing competition from tablets and other similar devices, has created a tough landscape, which Koh said made the achievement more significant for the vendor.

“In an industry that has declined 13.3 per cent year-over-year, we outgrew the overall worldwide PC market for the 16th consecutive quarter,” he said.

Koh adds that the vendor has also used the race to the top to “steadily improve” its financials.

“We also achieved record profitability, with earnings up by 34 per cent for the financial year of 12/13,” he said.

When it comes to the A/NZ highlights from that financial period, which ended in March 2013, Koh said the vendor shipped nearly 120,000 PCs into the education segment in the fourth quarter of 2012 and first quarter of 2013.

“Our notebooks in this period were number one by a sizeable advantage, with 40 and 41 per cent share ahead of Apple’s 26 and 30 per cent share in these same quarters,” he said.

In the SMB segment, Koh said Lenovo grew faster than the SMB market in four of the last five quarters.

“We achieved an all-time high share in the first quarter of 2013 for our SMB business when we hit sales that delivered 9.7 per cent share,” he said.

Referencing the latest market forecast from IDC, Koh said the vendor expects to grow its market share in the second quarter of 2013 when compared to the first quarter.

Life at the top

As was demonstrated by HP’s dominance, achieving the number one spot in PC sales is a rare opportunity that very few vendors can experience.

Now that Lenovo is number one, the questions is what if any changes take place when such a target is finally achieved.

Koh admits that it is a “historical milestone” for vendor and it was made possible by the support of customers, partners and the global Lenovo team.

At the same time, Koh characterises PC leadership as “just one milestone in a longer journey” towards becoming a leader in what the vendor commonly dubs as the “PC+” market, spanning devices such as tablets, smartphones, Smart TVs, as well as Cloud services and infrastructure hardware powering these devices, such as storage and servers.

“Notwithstanding this wonderful achievement, our focus remains the same,” he said.

“We are still committed to sustaining growth and profitability in our core PC business while we significantly accelerate our transformation into PC+.”

The vendor is currently ranked third in “smart connected devices,” with IDC’s most recent reports ranking the company at number four in smartphones globally, even though it does not market such devices in regions such as A/NZ.

Outside of the consumer space, Lenovo is pushing into industry standard servers and networked solutions through its joint venture with EMC Corporation that began last year.

“Both form the backend of the enterprise IT architecture that powers the PC+ era, and builds on our leading position as a provider of PCs to enterprise customers,” Koh said.

Staying the course

As for whether grabbing the top spot is putting more pressure and/or responsibility on the vendor, Koh reiterates that PC leadership is just one highlight in a the overall scheme of the PC+ market.

“We will continue to focus on executing our strategy, driving product innovation and delivering the best customer experience,” he said.

While Koh admits that the PC industry is experiencing a slowing growth, it is still a $200b opportunity with an enterprise refresh cycle forecasted for the second half of this year.

Koh said that Lenovo is well positioned to capture more of this opportunity than its competitors because of vendor’s “strong track record” it has “built over the years.”

Beyond becoming a leader in PC+, the vendor is also working towards becoming “one of the most respected technology companies in the world.”

“We consistently work to improve, not only our performance and the quality of our products, but how we do business, how we treat our people, the various communities we serve and the environment around us,” Koh said.

Asia Pacific at the forefront

In addition to being number one globally, Koh confirms that Lenovo is also currently leading the Asia Pacific market in PC sales.

According to Koh, the Asia Pacific region will “continue to be a critical region” for Lenovo in maintaining the leading sales position.

“Here we have the mature markets like Japan, where we are number one and where we will continue to protect our lead,” he said.

“There are also huge emerging markets like Indonesia and India where the opportunity for us is massive.”

As for how Lenovo will hold onto the top spot in the region, Koh said the focus will be strong on growing brand awareness, enhancing channel partnerships and growing its retail capabilities.

“Our ‘protect and attack’ strategy remains a critical success factor in driving top line and bottom line growth,” he said.

“It has helped us achieve rapid but strategic expansion, and also allowed us to establish a more balanced business compared to a few years ago.”

The vendor will be focused on protecting as well as strengthening its position in core markets such as in China, not to mention its lead in the commercial PC market, but Koh said that “high growth opportunities” such as emerging markets, consumer and mobile segments will also be pursued.

New form factors and device categories, such as convertibles in the form of the ThinkPad Helix, are highlighted as a key differentiator moving forward.

“Our continued emphasis on innovation has also contributed significantly to our PC leadership,” Koh said.

Channel plan

Lenovo’s A/NZ channel will be bolstered with the “New Rewards for New Business” program, which offers rewards and special pricing for acquisition opportunities via the channel.

“In the past twelve months, the channel enablement programs have provided partners with the opportunity to drive new marketing initiatives for sales and lead generation,” Koh said.

To better assist partners, Lenovo’s channel portal has been updated with new features, such as a customisable campaign builder tool and partner resources for training and professional development.

In late 2012, Lenovo launched its Platinum Certification Program to provide partners with a monthly online training course with rewards, and a new SMB thought leadership content program was launched recently to educate SMBs on how they can improve their business with trends such as BYOD and Cloud.

According to a survey Lenovo ANZ conducted with resellers in April 2013, Lenovo’s Partner Advantage portal and incentive program was ranked number one, with Lenovo paying out over $1.5 million in incentive payments.

Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.


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