Lenovo has risen to become the world’s largest PC maker, riding high from sales in its home market. However, Roderick Lappin, president, Asia Pacific, Lenovo expects the company’s mobile devices and enterprise solutions to bring in a significant part of the company’s revenue in future. “Markets such as India where the young and tech-savvy people are opting for the latest mobile phones and wearables will drive revenues for us,” he tells Sudhir Chowdhary in a recent interaction.
Give us a sense of the big story emerging out of Lenovo.
The story segregates by segments so I am going to break it into four pieces. In the PC space, where as a company we have about 19.7% market share, I’ll suggest that we can be a lot stronger. As the market consolidates and historically if you look at any of the markets that have shrunk, effectively it comes down to 3-4 players globally and we believe that it’s going to happen with PCs as well. Take India for example, where HCL has got out of hardware and is leveraging its services specifically, or in Japan where I live, Sony has exited the PC market at the beginning of last year. Therefore, we see that the market starts to consolidate. Lenovo has a fairly strong position in the traditional PC segment and I expect that it will continue to grow at a healthy rate in the future. Even as the PC market is in decline globally, the reality is it’s a $200 billion industry with about 300 million devices. Thus, we feel there’s still a lot of opportunity for us there.
From a tablets perspective, while the market is going the same way as PCs we feel there’s a big opportunity for us given our range of tablets and two-in-one devices, which fuel our growth in the market place.
Then comes the smartphone segment. I think it’s going to evolve and it’s going to change its form factors going forward. The smartphone and wearable device segment offers a significant business opportunity for us. Our market share might be in single digit but we are still the number three player in the world. I think that as we diversify our offerings and bring them mainstream in high growth markets such as India where we already have a fairly strong presence, the Lenovo product line will move up the value chain and we can also use Motorola to come up in the premium space. We have a large number of new smartphones and wearables products coming up in the next six to eight months.
Then, Lenovo is developing a software ecosystem and investing a lot of resources in the new Ecosystem and Cloud Services group, which will develop strategies to monetise company services. In short, Lenovo is very addicted to growth.
How is Lenovo performing in India?
For me personally, being the head of Asia Pacific market, India is a very strategic market. India is one of the largest, most populous countries of the world and we have got a good market share in PCs of about 19.8% last quarter. We are also growing dramatically in the smartphone space. But I think that we can do a lot better in smartphones and tablets space as well as definitely expand our range of wearables and IoT-based products in the future.
What are you doing to bolster your enterprise business in India?
As you might be aware, Lenovo has announced that it would spend $2.3 billion to buy IBM’s x86 server business. This will definitely boost Lenovo’s credibility in the enterprise market. It will sharpen our focus on the higher-margin enterprise business. From a commercial space, India is a very important market for us. There are a lot of opportunities in the country. However, we need to do a lot more to become a major player in the enterprise business segment.
What initiatives is Lenovo putting in place to gain customer traction in India?
We will expand our retail touch points especially in the Tier II and Tier II cities because as everyone is getting affluent in India, they are looking for technology. When you have thousands of retail stores spread across India like we do, it’s going to take us a little while but we are going to relaunch the brand and diversify our brand identity. And as we start to grow in India, we will get in more investment from our marketing dollar perspective so that people are able to easily recognise our brand, both from a Lenovo as well as Motorola perspective.