The popularity of netbooks has been so appealing that Chinese PC powerhouse Lenovo is weighing in on the options of possibly unveiling a Think branded netbook later in 2010. If that happens, it will equip its channel partners with more ammunition to address the SoHo and consumer space.
Although the vendor already offers, IdeaPad as its netbook brand, Lenovo is evaluating whether a Think branded netbook could enhance an already enterprise entrenched brand in the emerging markets region. Top of the agenda for Lenovo will be to address regions such as the Middle East and Africa with products that suit the market dynamics of the two geographies and help to arm its channel partners with a range of Think products that address different segments of the market.
Xue Linqun, Director, Think Business Unit, emerging markets at Lenovo, says although a decision hasn’t been made to introduce a Think branded netbook, if customers require such a product the company would gladly oblige. “We are always driven by our customers’ needs.”
Linqun says currently the IdeaPad has performed well in all the markets it has been introduced in. “We would like to ensure this continued success of IdeaPad range especially in the emerging markets region where netbooks have become an instance hit,” he says.
Linqun explains that Lenovo’s approach to new product developments is based on meeting customer expectations and needs. “The Think brand is evolving much faster and as this evolution takes place, we would like to extend the product outside the enterprise sphere,” he says. “The Think brand in both desktop and notebook offerings is gaining a lot of awareness especially in the emerging markets region.”
He explains that part of this rapid acceptance outside the enterprise sector has to do with the broadened product offering which is being offered at the right price points especially in the SMB space. “Our channel partners can expect more products in the Think range which should translate to more options available to them for their end-user clients,” he says.
Linqun says although it is company policy not to speak about products that have not been released into the market, Lenovo has been watching certain technology trends with a view of developing products when these technologies become widely adopted in the enterprise. “From a corporate enterprise point of view, we have been and continue to watch closely virtualisation and cloud computing,” he says. “We believe, having products that complement these technologies will open up cross-selling opportunities for our solution providers.”
He adds that from a Think perspective, Lenovo has for some time enjoyed a level of accomplishment with its consumer-centric tablet PCs. This year, Linqun says business tablet PCs will be introduced in most countries in the emerging markets region. “We see a lot of growth potential on the African continent with our tablet PC,” he says. “The market is growing and in just one year that these products have been introduced, a lot of SMBs and enterprises on the continent have embraced our Think tablet offerings.”
Linqun says the Middle East is a region that is of huge interest to Lenovo purely because of the number of government and public sector-driven IT projects especially in the GCC. “We are beginning to develop suitable Think products that address the specific needs of customers in this region,” he says. “We are working with a few customers in government, public and private sector to see how best we can bring to this region, products that are rightly priced and meet customer expectations.”
Linqun singles out the UAE and Saudi Arabia in the GCC as two countries where Lenovo continues to enjoy successful Think brand penetration from entry level machines right through to high-end enterprise solutions. “We would like our channel to get involved in this and sell some service offering in addition to the hardware they sell,” he says.
Given the popularity of netbooks and notebooks, is Lenovo going to scale down its investments in ThinkCentre desktops? With the popularity of netbooks in the Middle East and Africa (MEA) region, is Lenovo’s desktop market share shrinking?
Linqun says the Lenovo desktop market share in the MEA region is not shrinking and contrary to this belief, customers in this region are going for a mix of both desktops and notebooks/netbooks. “I do believe it is a bit of both and in organisations where mobility is important, you will find that such clients go for netbooks or notebooks,” he notes.
Having said that, Linqun points out in the past, Lenovo’s emerging markets challenge was as a result of lack of a resolute effort to address this market better. “I’m glad to say that this has changed since 2008,” he says. “The focus on the emerging markets hasn’t only been to address this region better and consistently, but to also equip partners and their clients with the right products and solutions that meet their business demands.”
Emerging markets plan
Chen Shaopeng, Senior VP and President Emerging Markets Group (EMG) at Lenovo, says although the company’s business has been affected by the global economic downturn in more mature markets, its business in the emerging markets continues to remain solid.
Shaopeng says because majority of the world’s population (80%) lives in the emerging markets region but the PC penetration is about 12% and Lenovo has realised the business potential that this region holds. “Through our own research and that which is provided to us by global analyst firms, future PC demands will come from the emerging markets,” he says. “In developing a strategy that for the emerging markets, we take cognisance of the fact that fast GDP growth and PC demand will come from this region.”
Shaopeng emphasises that the strategy for the EMG on how it will address this region is a gradual yet focused approach as it would like to build a business and channel model that is sustainable and for the long term. “We are very cautious in our approach of enhancing our presence in the emerging markets,” he says.
He explains that the emerging markets push will revolve around Lenovo’s SMB and consumer range of products. “We would like to attack this region with an effective business model that has a lean cost structure,” he says. “We believe aside from the SMB and consumer focus, Lenovo has the advantage of bringing to different markets and countries products tailored to suit the needs of customers.”
Shaopeng acknowledges the challenges that lie ahead and says key to achieving anything significant in the region will orbit around building and enabling the channel and all the support structures that can help serve the SMB and consumer markets.
The phased focus of the emerging markets will see countries such as India, Russia, Malaysia, Turkey, South Africa, Middle East, North-west Africa and East Africa kick start Lenovo’s push and attack in the SMB and consumer space. Once the business model is successful in these countries, it will be adopted to other countries.
Shaopeng says in the past Lenovo had a lower focus and didn’t give the emerging markets outside China the attention it deserves before 2008. “We are changing this and in 2010, the focus will be at regional and in country level,” he says.
In addition, Shaopeng says the company has taken a decision to expand and enhance its product portfolio coverage all in an effort of serving this region better. “Although we will be expanding our product line for SMB and consumer ranges, a rich product line takes time,” he says. “We know our portfolio coverage for this market needs to be enhanced. We have the advantage in that our research and development (R&D) is in-house and as such we are able to develop products that address the needs of our clients.”
He explains that by offering channel partners more products, there will be in a stronger position to offer their end-user clients broader product options.
Shaopeng points out that one of the most successful strategies in China has been Lenovo’s approach to reaching out to the rural population in that country. “We have a desktop PC which we have dubbed ‘the wedding series’ and it has been very popular among the rural population in China,” he notes. “We are hoping to pilot a similar range in India and Turkey in the Middle East and depending on the pilot we are hoping to extend this business strategy to our channel partners who we hope will be able to target low income earners in other countries in the Middle East and Africa.”
Shaopeng says he is encouraged by what most Middle East governments are doing in building knowledge-based economies in which IT and IT services are at the forefront of this advancement. “The Middle East region remains one of the most strategic for our business as it’s also a supply hub for the rest of Africa,” he says.
Lenovo recently unveiled its IdeaPad U1, a consumer Windows laptop with a touchscreen that can be detached and used as a separate Linux tablet computer.
Used conventionally, the 3.8-pound U1 runs Windows 7 on an Intel Core 2 Duo CULV processor and, reportedly, a 128GB solid-state drive.
But pull off the 11.6-inch multi-touch-enabled screen, and it powers up as a full tablet in its own right, running Lenovo's custom Skylight touch-enabled version of Linux via a 1GHz Qualcomm Snapdragon ARM chipset and a reported 16GB of flash memory.
Other vendors have released notebooks that can double as tablets after users swivel the screen. Lenovo's ThinkPad X60 is one example. The IdeaPad U1 appears to be the first in which the screen not only comes off completely, but also comes with its own processor.
The Chinese PC maker, says it decided to call the U1 “the industry's first hybrid PC for consumers” and adds that “two brains are better than one.”
The IdeaPad U1 will be available June 1 at an estimated retail price of less than US$1,000.
With all these new Think products Lenovo is readying for different segments, the company seems to be preparing multiple solutions for its clients. Now it needs to up the ante and serve the emerging regions consistently and with a broaden product portfolio.