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Chinese PC maker Lenovo has emerged as the second largest player in the PC market in India. The company further intends to focus on SMEs and smartphones. Amar Babu, Managing Director, Lenovo India, discusses the plan of action with Heena Jhingan. Excerpts
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Lenovo has had a good year in the India market. How do you plan to sustain this pace of growth in the quarters ahead?
In the last couple of years, we have seen all our business segments in India accelerate. We have been striving to take on the market with our ‘protect and attack’ strategy, a 360 degree approach to the business where we crack at the competition and guard our own position at the same time.
Lenovo will protect its position in the enterprise business (current market share at 16.4% as per IDC) and continue to attack the consumer (current market share at 13.5%) and SMB business (market share at 7.5%).
According to IDC’s Asia Pacific PC shipment tracker report for the OND quarter 2012, Lenovo is the second largest player in the overall PC market in India with 13.2% market share. We are committed to sustain this growth and aspire to become one of the leading players in the PC+ era, which is expected to be dominated by four screens (PCs, tablets, smartphones and smart TVs). We will drive balanced growth across all geographic regions, customer segments, and product categories and will continue to provide next generation solutions in smart devices.
How have you performed in the tablet space in India vis-a-vis penetration in enterprises? Also, the industry has just begun talking about phablets targeted at enterprise needs. Do you have any plans to launch phablets?
Tablets are definitely creating a buzz among end consumers and every vendor wants to be associated with this category. That said, the tablet market for enterprises is still at a nascent stage, and enterprise customers are still evaluating the benefits of introducing tablets in the workspace, because of the added implications of data security and the effectiveness of existing networks to enable seamless access to data. As of now, the market is on a wait-and-watch mode for enterprise tablets and we saw limited traction for tablets in sales automation. Phablet is an even more recent phenomenon.
We believe that while tablets will not replace PCs, they augment the total computing experience by enabling greater collaboration and productivity in the enterprise. We will continue to invest in innovative products and solutions for the market and we have planned a range of products for the enterprise customers in the near future.
What is your India strategy to capture the SMB segment?
India is home to over 50 million SMBs and more than a third of India’s GDP is attributed to the SMB sector. Out of these, we believe currently 10 million SMBs are technology-ready. The SMB PC market has been growing at a rate of 4-5% over the past few years, and is now expected to grow much faster at a rate of 8-10% in the next five years. The growth is being led by businesses with less than 10 employees, outside the top 8 cities in India.
In order to garner more market share in the SMB segment, our aim will be to focus on expanding the SMB value added reseller and systems integrator channel. We are considering expansion of our retail footprint with the launch of more exclusive business stores.
What is your strategy to boost the company’s smartphone business—one that is highly price competitive?
India holds a tremendous growth opportunity for smartphones. The smartphone share in the total phone market here is currently less than 10%. Leveraging our existing smartphone portfolio featuring 19 smartphone products that are available in China, we want to be present in the premium, mainstream and entry-level segments in India, where 3G smartphone penetration still remains low.
In 2012, we launched five smartphones ranging from Rs 6,500 to Rs 28,000 in India in select markets (Gujarat and parts of South India) and are registering good response. We will be launching some new handsets in the country over the next few months.
All vendors are hard-pressed to re-engineer their PC strategy. What is Lenovo’s plan?
While being a market share leader is important in our business, it is innovation that will set us apart as a PC+ leader. Our focus is on driving even more innovation, while building on our existing competitive strengths. Lenovo sees a ‘PC+ evolution’ not a ‘post-PC revolution,’ wherein PCs will remain central to the digital lives of millions of people and businesses as well as at the heart of an ecosystem of tablets, smartphones and smart TVs. We have been very successful in the PC space. We are also the largest exclusive PC retailer in India, so this gives us an advantage in retailing our smartphones across the country. We also have a robust portfolio of tablets. We are confident of the potential of the market and remain committed to the PC+ industry for the long term.
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