Lenovo: The Biggest Computer-maker Most People Have Never Heard Of

“I don’t like arrogance or to be pretentious but our strategy, actions, commitment and goal is definitely to become of the larger ones and that includes number one.

“We’re fourth at the moment with 10pc but we’re gaining fast. A year ago, we were 5.6pc behind Acer but in the first quarter we were just 1pc behind them. Dell has 12.6pc and Hewlett-Packard 18.6pc.

Dutchman van Duijl just has a tough job telling UK consumers just how big Lenovo is. Formed out of Legend Holdings in 1984, the Chinese company is the biggest computer-maker most people have never heard of.

Having bought IBM’s personal computer business in 2005, it has a legacy of users of the US group’s former ThinkPad brand but anyone you spot on the Tube using a ThinkPad has almost certainly obtained it from their employer.

Although there are a few UK shops that stock Lenovo products, it is not generally in the British retail marketand changing that will involve a huge media and promotional spend.

The problem is that the UK computer market has hardly been in the best condition for such an assault, with first quarter consumer sales diving by 30pc – the worst performance in Europe – justifying Lenovo’s decision last year to delay a British consumer launch.

So when will it happen? This autumn? “Don’t know yet but that would be good,” van Duijl deadpans. “We’re waiting for two things. We’re launching in Germany, the biggest European market and rolling out our branding campaign there. We’ll see how the products, retail merchandising and branding come together there.

“When that goes well, we’ll do the same thing in the UK. Not everyone has heard of us or knows what Lenovo is so when you go into retail in a country, you have to make it go together with branding.

“You have to see it at Heathrow. St Pancras, Paddington station, the newspapers and the internet so you have to put a fair amount of money against it.”

How much? He’s not saying but, with consumer sales representing just over 50pc of the UK PC market, he believes a UK launch is imperative.

“My personal plan is that we’ll do a UK consumer launch this year,” he adds, “but it really depends on what the market is doing.”

Lenovo is doing a lot better in other UK markets, where the IBM legacy gives it 10.7pc of the commercial segment, ranking it third behind Dell and Hewlett-Packard.

It sells to big corporate customers such as BT, HSBC, Deloitte and PricewaterhouseCoopers and claims to be the fastest-growing PC vendor in that space.

“The UK is the second largest market in Europe after Germany so it’s very important for us,” says van Duijl.

“In global enterprise, it’s a big market. There are very few companies that don’t have our products and ThinkPad is probably one of the longest-running most successful products being used by corporate customers. Then, the public sector, education and retail markets in the UK are also large.”

In the future, however, Lenovo, which employs 230 people near IBM’s old UK HQ in Hampshire and at a logistics centre in Paisley will need much more than a revamped ThinkPad to build worldwide market share to levels approaching its Chinese dominance.

Its new “Idea” range of notebooks, desktops and tablets have already sold 11m units worldwide while it has a new logo “For Those Who Do” to gear up its brand everywhere except China, where interestingly the strapline literally doesn’t make sense. Lenovo tablets will launch in the US, Japan and Germany this summer.

Though Van Duijl’s “mature markets” division accounts for 36pc of Lenovo’s sales, its 10.2pc market share is mainly driven by China and Lenovo is aiming to increase market share in the US from 6pc to 10p over the next few years.

The Chinese company will also be number one in Japan with a 24pc market share from next month, thanks to a new joint venture with NEC, which has 18pc of the Japanese market.

In the corporate space worldwide, it also has a respectable market share of 18pc-20pc.

“When you look at it overall, our progress has been quite remarkable,” says van Duijl. “This is the sixth quarter in a row that we have been the fastest-growing PC company on the planet.

“In our most recent full-year we grew volumes by 27pc and the market declined by 2pc.

“We’re now a $20bn company in revenues terms and we have double-digit market share in 15 countries.

“We’re number one in emerging markets, number two in commercial notebooks and number one in the global enterprise market.

“The problem we always had was that we were losing money in the IBM parts. We organised, built a new business model and started to claw our way back and went into profit in mature markets in the second quarter of 2010.

It’s still difficult to escape the feeling that China will continue to drive Lenovo’s success. “One in three PCs in China has the Lenovo brand name on it,” says van Duijl “and Lenovo is as well-known in China as Coca-Cola is in the US.

“If we were to keep our market share there the way it is, we would grow in absolute numbers based on PC penetration.

“Some 16m PCs were shipped in China in the first quarter of this year and there are 1.5bn people there so just figure that out. Also, China still has internet penetration of only 38pc, compared to 83pc in the UK.

“I still believe when you look at all the product categories tablets and mobile phones, we can still grow our market share in China.

“But just playing catch-up is never a strategy that I would do. You always need a balanced strategy.

“We have a strategy which goes on one sheet of paper and there are two legs to it. There’s the protect part and there’s the attack part.

“It’s almost a boxer protecting the vital parts of your body with one hand and jabbing with the other to strike.

“We’re protecting our China business. For the past 19 quarters, we’ve grown faster than the Chinese market and we’re nearly three times as large in China as Dell, the second largest player with 10.3pc.

Lenovo also wants to protect its 20pc share of worldwide sales to large multinationals, the enterprise companies and the public sector.

Then, the attack strategy is aimed at retail markets in China, where it already sells through 10,000 shops, plus the US, where it is the sixth largest player with a market share of 5.8pc but now sells notebooks and laptops in more than 1,200 Best Buy stores.

Its eyeing other Asian markets too, while in Germany, Lenovo is also on the attack, last week paying €629m got consumer electronics and PC manufacturer Medion in a move that will double its market share and make it the third largest PC player.

So when’s the UK launch? Watch this space, is all van Duijl will say. My guess is that Lenovo’s competitors will all be doing that too.

telegraph.co.uk