Chinese device maker Lenovo wants to be known as a PC+ brand in the marketplace. Acutely aware that the PC market is fast dwindling and there is a strong customer demand for new-age mobility devices such as smartphones, tablets and convertibles, this $34-billion Beijing-headquartered company has rolled out an aggressive business strategy in order to drive revenues in what it calls the PC Plus segment. A strong performance in the second fiscal quarter ended September 30, 2013 is proof that Lenovo's transformation strategy is playing out well, but more on it later. First, a look at its new-found aggression to improve the market share in India.
Lenovo has identified India as a high growth market for the company's future growth, says Amar Babu, managing director, Lenovo India. "The market worldwide has trended towards smartphones and India is no exception, as the young and tech-savvy people are opting for the latest devices that can perform multiple functions. We are looking at product expansion and focused marketing to strengthen our market in India."
Last week, Lenovo introduced its stylish and sleek smartphone—the Vibe X. It sports features comparable to those of a high-end superphone such as the face orientation rotation feature, the smart call feature, the Smart swipe, the pocket mode, etc, but is attractively priced at R25,999. "Globally, we have emerged as the No. 4 smartphone brand. In India, we have made an interesting beginning and we expect our growth trajectory to continue with the introduction of newer models," says Amar, responsible for driving the overall business and growth of the brand in India.
Lenovo forayed into India's fast-growing smartphone segment last year and has since introduced a slew of mobile phones, tablets and convertibles in the market. It is targeting the entire spectrum of the market— top level, premium segment, middle segment and the entry-level segment. Lenovo expects to garner 5% share of the smartphone market in the country in the next few years. It intends to launch a number of devices to consolidate its presence in the Indian market. "After a detailed study of the consumer requirements, we aim to address the major mobility demands of the country," he adds.
The Indian smartphone market grew by 229% year-over-year in the third quarter of 2013, according to research firm, IDC. Vendors shipped a total of 12.8 million smartphones in Q3FY13 compared to 3.8 million units in the same period of 2012. Q3FY13 grew by close to 28% over the units shipped in the second quarter of 2013. IDC has revised the Q2FY2013 numbers for smartphones from 9.3 million to 10.02 million.
"The growth in the smartphone market continues to drive the overall growth numbers for the phone market—given that there's still a huge potential for smartphone penetration in India, this trend is expected to continue in the coming quarters," says Manasi Yadav, senior market analyst with IDC India.
According to CyberMedia Research, Lenovo has figured for the first time amongst the top three India tablet PC vendors in its recent survey. Tablet shipments in July-September 2013 touched 1.20 million units, recording a growth of 9% year-on-year and a modest 4.7% increase quarter-on-quarter. Lenovo notched up a market share of 13.3% in tablet shipments in Q3, 2013.
Globally, Lenovo continues to
diversify its business and build a strong foundation for the future in the PC Plus era with robust performance in PCs and mobile devices like tablets and smartphones. The company posted a record 29 million devices sold in the second fiscal quarter ended September 30, 2013— which is about four devices every second. Lenovo's second quarter mix of sales from mobile internet and digital home (MIDH) products, which includes smartphones, smart TV and much its tablet business, was 15% of total revenues ($9.8 billion), up from 8% one year ago and 4% two years ago, with steadily improving profitability.
In fact, Lenovo ranked second in combined PC and tablet shipments, and was the third-largest supplier of smart connected devices, which includes PC, smartphone and tablet products, growing shipments 36% year-over-year. Lenovo's combined shipments of smartphones and tablets surpassed those of PCs for the second quarter in a row. It also continued to be the world's fourth largest smartphone supplier, rapidly expanding shipments 78% year-over-year. Finally, Lenovo had a record high of 2.3 million global tablet shipments, up 4.2 times year-over-year, driven by sales outside China. Together, these results show Lenovo's rapid ongoing transformation into a PC Plus company.
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