Company wants to take a big slice of tablet and smart-phone markets
Lenovo is ready for a big leap into the smart phone and tablet markets with a strategy called the 'PC+Era'.
Milko van Duijl, president for Asia Pacific and senior vice president, Lenovo Group, said that we are now in the PC+ era. In the next two years, it wants to have as big a share in the tablet market as it has in the notebook market, depending on how fast the market can grow.
"There is some cannibalisation between the notebook and tablet markets. We do not believe it is the post-PC era. PC will continue to be sold in huge quantities - desktop, all-in-one and notebook. More people are moving to work on tablets and smart phones. We right now have more than 15-per-cent share in the PC market [Windows-based computer], ranked No 2 just behind HP. We are really focused on PC+," said Duijl.
At the end of last year, Lenovo had about 1.3 per cent of market share in the tablet market worldwide, but it has 74 per cent year-on-year growth. Its tablet has been in the market for a while, but it will launch new models this month.
"Smart phone is a tremendous market. Lenovo can grow aggressively in this market. Lenovo's target market is divided into; China, emerging markets, and mature markets," said Duijl.
"In China, we are number two after Samsung. We want to be number one. We doubled out sales volume last year and profitability in the last two quarters," said Duijl.
In the Asia-Pacific region, he said it has an aggressive market plan to gain double-digit market share in the smart-phone market.
"We cannot commit how long it will take to achieve this goal but we are committed to offering value to the market, with innovative products including short product lifecycle. And within a year it will do the same things in mature markets," said Duijl.
He added that the strategy is a three-step market approach: First, it will start in China. Next, it will explore emerging markets similar in structure to China like India and Indonesia, followed by mature markets.
"We want to continue to dominate China. Every product that we have, we will start in China. It is simple. We are very large and we want to be number one in China. We have a strong brand and distribution. We start PC+ in China. Next, we expand PC+ to Asia Pacific and emerging markets like Latin America, Africa, and Middle East. We aim to have significant market share in tablets and smart phones," said Duijl.
The priority emerging markets are India, Indonesia, Philippines, Vietnam and Thailand. There are no plans yet to launch the smart phone in Hong Kong, Taiwan, Japan, and Korea. It will be done in the future. He said Lenovo's strategy is to not launch smart phones at the same time in many countries, but just launch in one country like China to be successful, get market share and profitability, learn activities from China and then go to other markets.
"China represents 25 per cent of the global smart-phone market, and we are now number two in the market. We are getting towards becoming number one in the future," said Duijl.
The three key factors for the success of smart phones are the product, the brand and local channel. In Thailand, Lenovo has two major distributors - Ingram Micro, focusing on telecommunication channel, and ECS that develops and focuses on the IT channel.
At the launch last month, it released six new models with two each in three categories - entry models, stylist model and high-end models. It is to cover the different price points, markets, and demands. However, it has many more models in China.
"We have 50 models in China; we launched six in Asia Pacific. We can add more models in the market immediately if we see potential in those markets. One reason behind our success in the smart-phone market is that we do everything in-house - research and development, design, manufacturing, and testing. We do not depend on anyone when we want to add models to the market. All are in our control," said Duijl.
The key strategy of Lenovo smart phone is to focus on innovation. As the whole process is in-house development, Lenovo can bring innovative products to the market. It can make changes and adjust product specifications very quickly, therefore it can release smart phones at any price point and offer a wide range of models. This is vastly different from the other vendors like Apple and Samsung.
The vast majority of Lenovo is Android-based. Currently, according to International Data Corporation (IDC), in the smart connected device market, including smart phone and tablet, Lenovo comes in at No 3.
"Smart phone to us is the combination of voice and data devices. Smart phone is a small PC," said Duijl.
Lenovo has a four-screen strategy. It is already dominating the desktop and notebook markets. Now, it wants to dominate in tablet and smart phone as well as TV. It now has a lot of activities with partners to launch a TV.
"We are very strong in desktop and notebook. Our expansion is in tablets, smart phones and TV, which is smarter. We believe people will use all of them for serving their purpose every day. They will use these devices according to their usage models," said Duijl.
He said Lenovo would bring products that are very successful to Thailand and to markets where they have good distribution channels and good relationship with the telcos. "We will roll out the whole new line-up of tablets by the end of June. They are not only one or two models. We will roll out more products at multiple price points in the market to cover all market segments.
The local channel is important for success in the smart-phone market. Lenovo works closely with local partners to expand the coverage of channels to the entire market, he said.
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Article source: http://www.thethailandlinks.com/2013/07/01/ambitious-lenovo-gears-up-for-pcera/
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