Having worked at HP for more than a decade, Alex Ebeid is now Lenovo’s UK consumer director – and is planning on knocking his old employer off the UK’s No.1 spot by using innovation to grow in a consolidating market.
He talks openly to Dominic Sacco about the PC vendor’s new look, new product categories and new strategy which has made Lenovo change with the times…
It’s been ten years since Lenovo acquired IBM’s PC business. You’ve just outlined a rebrand at your Tech World event – why is Lenovo changing?
Ten years ago, Lenovo was ranked number nine in the PC industry and acquired the IBM PC business, with 2.3 per cent market share and $3 billion in revenue annually. Now, Lenovo is a very different company. It’s a $46 billion business and number one in the PC industry, with one in five PCs being sold by Lenovo around the world. Lenovo has changed into a ‘PC and other’ company I would say, with the ‘other’ being smartphones – we shipped 76 million smartphones last year, combined with Motorola, making us the number three player in the world.
We are the number three player in the world in tablets too. If we put our PC and our tablet business together we’re number one. What you saw at Tech World were other things that we’re thinking about in the future, we’ve got the services part of our business around cloud computing, we’ve got some apps that have hundreds of millions of people around the world using them like the Shareit app, which lets you share info between devices. To cut a long story short, we’re not changing – we have changed. We’re a very different business to what we were ten years ago and it’s an exciting place to be.
What kind of marketshare do you have in the UK and what are your aims here?
My guess is that we want to become number one in the UK – we don’t give a timeframe but that’s our ambition. We are currently number two with a share of about 17 per cent. The leader is HP with a share of about 25 per cent. I look after the consumer side, so in the consumer segment we were number five a year ago, we’ve now got ourselves to a number two position, so we have really transformed our business locally. We have a 15 per cent share of the UK market and our ambition is to get to 20 per cent as soon as possible. And we’re currently on track to do that.
Lenovo has sold 100m ThinkPad laptops and your Yoga tablets are popular. Why do you think this is and what’s next?
Yoga is a very strong consumer brand. The 2-in-1 market is a growing part of the PC business, particularly within consumer, and you can expect us doubling down in that area in the immediate future. We are investing heavily and it’s all a part of the re-branding – we’re really focused around how we drive more Yoga sales. In terms of ThinkPads, they are more the enterprise and B2B space – obviously this is the brand Lenovo inherited when it bought IBM PCs. It’s a very strong brand in its own right and goes from strength to strength.
How does your consumer business compare to the B2B side?
Just over half the market in terms of volume is in consumer, and just under half the volume in the market is in B2B (SMB and enterprise). On the commercial side, the enterprise business is very, very strong. We’re near a 30 per cent share, and with the SMB sector, we’re quite close to where consumer is, around the mid teens kind of area. I would say we’re balanced and we have a very strong enterprise business which is growing.
You’ve revealed your first streaming device – the Lenovo Cast. What are your sales expectations for that?
We haven’t announced the launch date in the UK, but if you look at the home now there are multiple devices that you want to share content between. People are investing money in not only better routers and power lines, but they’re also investing in products to get their data and stream it across different devices. That’s why we are pursuing it.
There are already products on the market and we can see them doing well. Lenovo’s going to be joining that and I would say watch this space soon for more products coming out of the Lenovo house directed at that part of the market.
Lenovo came under fire earlier this year around the Superfish ‘malware’ which was pre-installed in some of its devices. How did this impact sales and are you now on the road to recovery following this?
As soon as we became aware of Superfish, Lenovo worked extremely hard to rectify the problem. Obviously it wasn’t ideal and Lenovo has publicly said it wasn’t our finest hour. We worked with Microsoft and McAfee as well as retailers to ensure that all our customers were protected and that Superfish was removed from our devices.
Now going forwards, we have also talked about delivering a safer and cleaner PC experience and that will come when we launch with Windows 10, so there’s been an internal review about what kind of freeload software we put on our PCs to ensure we give our customers the best experience going forwards. We have not seen any impact in demand on our products (following Superfish). We’re still gaining share.
For retailers who aren’t aware, who are your UK distribution partners?
Our UK distribution partners are Exertis UK and Westcoast.
Analysts are saying that tablet sales are falling but notebooks, all-in-ones and 2-in-1s are more resilient. Is this something you’re seeing at Lenovo?
If you look at the GfK monthlies, the tablet market has been in decline for the last nine months or so. The challenge for vendors in that market is to bring innovative products as well as a reason to buy. We have been growing share in that consolidating market and I firmly believe it’s because we’re bringing some of the innovation to what customers want. But I think that’s why the market is declining overall because there isn’t enough innovation in that category.
On the notebooks side, while they are growing, the challenge here is that ASPs have been declining. However, we’ve got a very strong gaming line which helps retailers sell hardware at higher ASPs. Then in the desktop market there’s a growth towards all-in-one; people are migrating from towers to all-in-ones. Now the great thing is we have about a 40 per cent share in all-in-ones so it’s a really good opportunity for Lenovo.
How do you see the desktop sector changing this year and next, in light of new form factors, and how will UK retail evolve?
There are different form factors in the tower space, so on the entry level there’s the PC on a stick market and then the small form factor market. I think you’ll see Lenovo provide solutions for both, and we’ll go after both of them in the near future.
In terms of tech retail, the shopping experience has changed dramatically in the last 10 years. You’re seeing this move into omnichannel, and think those retailers that have the best omnichannel experience with the customers will win.
10 THINGS YOU NEED TO KNOW FROM TECH WORLD
1. Lenovo unveiled a new logo at its Tech World event, saying it “reflects Lenovo’s personality and incorporates its rich heritage of acquisitions and original innovation DNA”.
2. A Google Chromecast-rivalling streaming device from Lenovo is set to hit the market, as is a PC on a stick product.
3. Lenovo announced that David McQuarrie will lead its UK and Ireland business going forwards. He replaces Marc Godin, who has become EMEA VP of supply chain.
4. The company is working on a Magic View smartwatch with two screens and a virtual display.
5. A Smart Shoes concept was shown off. It’s an Internet of Things (IoT) product that tracks data including heart beats and calories consumed, while providing maps and directions to places.
6. Lenovo is exploring emerging fields such as robots and unmanned aerial vehicles.
7. Smart Cast is a smartphone concept allowing users to project content and virtual interactive interfaces (such as a virtualised keyboard for typing).
8. There will be Cortana integration with Lenovo devices, including REACHit, whereby users can extend the search capabilities of the Windows 10 virtual assistant to non-Microsoft services.
9. A new ThinkPad 10 tablet was revealed to mark the fact that 100 million ThinkPads have been shipped to date.
10. Two SAN storage arrays were unveiled: the S2200 and S3200.