Channel continues strong performance for Lenovo

Lenovo has also just relaunched its New Customer Bonus program, giving the option of a front-end as well as a back-end rebate.


Chris Frey, Vice President North America Commercial Channels and SMB at Lenovo


Lenovo has reported another strong quarter, with an 18 per cent revenue and a 23 per cent increase in earnings, even though key acquisitions of IBM’s lower end servers and Motorola’s smartphones continue their slow pace through the regulatory approval process.

“We saw very good earnings as it relates to the globe, and all of our products inside all our geographies saw very nice growth as well,” said Chris Frey,Vice President North America Commercial Channels and SMB at Lenovo. “For 21 quarters in a row now, we have outperformed the market. “We are number one in PCs for the fifth straight quarter, and grew our share by 2.7 per cent. We are number three in connected devices overall — PCs, tablets and smartphones. We now have our smartphone business in 38 different countries.”

Canada and the United States are not among them however. Frey indicated that once the Motorola Mobility sale to Lenovo is approved, Lenovo will be selling smartphones in North America.

“Both the IBM and Motorola transactions are on track relative to what our expectations were,” Frey said. “We are not distracted as they work their way through the process, and go to market with the portfolio we have today.”

Frey said that even without smartphones, the North America, which is a large part of the Americas business, has grown to the point where it is critical to Lenovo’s success.

“The Americas is now 22 per cent of the total Lenovo business,” he said. “When IBM’s PC division was acquired. Lenovo’s business was mainly China. The Americas is now a very significant part of the contribution, with both revenue and profits growing at 27 per cent. The Americas business is strong.”

Frey said that the channel in North America grew its total revenue over 20 per cent this quarter.

“85 per cent of our commercial business in NA goes through the commercial channel,” he noted. “We also grew our number of partners by 22 per cent year over year.”

Lenovo’s SMB business is around a quarter of the whole in North America (with another quarter being consumer and a half larger accounts).

“Our whole strategy around channel is that the channel drives SMB business and small public sector accounts, and last quarter, our SMB segment grew over 60 per cent, and we picked up 4 per cent of market share in SMB,” Frey said.

Frey also pledged that Lenovo won’t treat partners any differently due to its growth.

“Just because you grow and become more relevant to the market doesn’t mean you change your culture,” he said. “We have a belief that the channel has helped us and we will continue to work with them. Our historical view of partners, including small partners, will be our futuristic view. It’s about training, building trust and making sure people are being properly compensated.”

For example, Frey said Lenovo remains very focused on making sure they solve partner disputes.

“If you scale your business, but can’t support partners properly and the experience isn’t good, people will quit recommending your product,” he said.

On the programmatic front, Frey touted the success of the combat kits Lenovo first brought to market with the Mobility Kit after its 2013 partner event. Since then it has launched a refreshed version of that kit, plus new ones covering Servers and Education.

“These four kits have touched over 5,000 customers,” he said. “We will continue to leverage kits, depending on what is changing in the market.”

Frey also indicated that the New Customer Bonus program has just been relaunched.

“It has been a back-end program up to now, but now the partners have the choice to leverage it on the front end,” he said. “This has generated very positive feedback.”