Lenovo’s view is that the telcos are the preferred route to market for Motorola, but Lenovo also wants to go to market with alternative routes as well, to get more devices to more people.
Chris Frey, Lenovo’s VP of North American commercial channels and SMB
Lenovo is coming off another strong quarter. But much of its news these days is focused on the conclusion of its recent acquisitions of Motorola Mobility and the x86 server line from IBM. While their public comments on the Motorola integration are still very high level – and there is good reason to suspect the go-to-market details have not yet been finalized – Lenovo’s North American smartphone business, like its server business, will be guided by the ‘One Lenovo’ philosophy the company has recently been articulating.
“The North American channel will be focused on what we are calling One Lenovo and One Channel,” said Chris Frey, VP of North American commercial channels and SMB at Lenovo. “It means one coverage model, and one community. We won’t be in siloes from a product point of view. Our sales force will be in one compensation plan. And there will be one set of channel programs.”
Frey also stressed that they want everything in one program as soon as possible.
“We are not going to have specialty networks that are treated differently with competencies that may not fit partners’ business model,” he said.
“This all kicked in on October 1,” Frey added. “We have had great feedback from partners on the One Lenovo, One Channel message, particularly about being bold and moving fast.” To this end, the x86 servers are being quickly integrated into Lenovo’s distribution model. While the IBM channel programs will stay the same for now, the plan is to integrate them into the Lenovo program fairly quickly.
Several distributors have talked with ChannelBuzz about ongoing discussions with Lenovo about the distribution future of the Motorola line in North America, but Frey strongly suggested that from Lenovo’s end, the go-to-market strategy has not been finalized.
“For the distributors, this is important because for the last 12 months, they have been talking extensively about mobility strategies, as they try to encompass it all and tie it into their cloud strategy,” Frey said. “From Lenovo’s view, today the preferred route to market for Motorola is the telcos – but we also want to go to market with alternative routes as well, to get more devices to more people.”
Frey said Lenovo smartphones are now a strong number three globally, even though they have not sold any Lenovo phones in North America, preferring instead to build their smartphone business here through the acquisition route.
“It’s hard to migrate the ecosystem we have built around the world to North America,” he said. “It’s easier to acquire a brand known in North America, as we did. It’s much quicker to buy a brand than build one.”
Frey said Lenovo was pleased with their success across the board in their most recent financial results.
“In the PC world, we are number one, and we are number three in tablets, where last quarter we grew eight times faster than the market,” Frey said. “For the first time, when you combine PCs and tablets, we are number one in the world.”
Frey also indicated Lenovo sees the convertible tablet-PC as the next hot form factor.
“We believe this form factor’s growth in the next 12-18 months will be very strong, and we have just shown a record share of 40% growth there year over year,” he said. “It lets people have one device instead of two.”
Frey also noted that while the convertible has been around for years without taking the market by storm, Lenovo thinks its time is now.
“They are thinner than ever, and are no longer big and bulky,” he said. “The weight and form factor are important in their usability. A lot of our innovation is going into that market.”
Frey indicated that Lenovo’s notebook business in North America was still strong – and in all price bands. He also said their back to school K-12 business saw a record volume in both notebooks and desktops.
“Our servers were at an all-time high before the acquisition,” he said. “We are number one in 1U servers in the market, and now we have the full stack of System X.”
Frey also said that while HP has decided that their enterprise and PC/printer businesses can best be managed in two companies, Lenovo has a fundamentally different business model than HP.
“We spent billions of dollars to offer the best hardware innovation and deliver the best experience,” he said. “Our goal right now is to focus on what we are good at and not be distracted. What we are good at is hardware. We are in the hardware business. We don’t want to compete with our partners in other areas.
“While we are expanding our product portfolio with the server and smartphone acquisitions, we want to be looked at as one Lenovo, one channel, one set of everything and integrate as fast as possible.” Frey added. “At the end of the day, we are a channel company: One Lenovo, one channel.”
