PC Adoption: How Lenovo Is Driving Relevance

by Preeti S    Sep 30, 2015

PC

For the past few years, the future of PC has been a major discussion point with the rise of smartphone adoption. What are strengthening those views are reports projecting a decline in PC sales with every passing year.

Despite the negative projection, some PC companies are optimistic that the PC market will recover from the slowdown.

What actually makes them confident is the limitations of smartphones, which are considered good devices for content consumption but not content creation, and they are hopeful that the every part of the world will realize the potential of the internet beyond the device usability.

Lenovo, which is betting big on the PC market, is of the opinion that smartphones are, in fact, paving the way for PC adoption.

Bhaskar Choudhuri, Director Marketing, Lenovo India, says: “In India, out of every three people accessing the internet, two are on smartphones. What phones are doing is opening up the possibility of internet to the first-time users. When one understands that, the person can explore more opportunities on PC. So we are working complimentary to that segment.”

Lenovo, the world’s No.1 PC player, has launched ‘Start up with Lenovo’ initiative to increase PC usage in Karnataka. This is part of its initiative to jumpstart India’s computer penetration, which is currently 10% and is the lowest among developing countries like Malaysia (64 pc), South Africa (18%), Turkey (49%). Lenovo is targeting first-time users, students and households in India to grab the market share. As part of its new initiative, it is offering finance scheme and huge-scale promotion to drive awareness.

Challenges faced by PC makers

IDC predicts the worldwide PC shipments are expected to fall by 8.7% in 2015 and not stabilize until 2017. Growth is expected to resume in 2017, led by the commercial market, while consumer volume continues a small decline through the end of 2019.

The combined desk-based and mobile PC market in India totalled nearly 2.2 million units in the second quarter of 2015, a 13 percent decrease over the second quarter of 2014, according to Gartner.

Among the reasons for the fall of PCs is the decrease in replacement activity. Ranjit Atwal, research director at Gartner, says: “Users are extending the lifetime of their devices, or deciding not to replace their devices at all.”

If that is one of the reasons for the PC makers to be worried about, they are in the process of driving relevance and increase penetration of PCs in India.

Bhaskar says: “A biggest challenge in enterprise is the slowing down of the refresh cycle which is more than 4-5 years. Hence we need to come with relevant strategies to bring it down.”

How to drive relevance to PC adoption

There is a correlation between the PC adoption and local economy and GDP. The PC makers like Lenovo are trying hard to build the ecosystem and drive relevancy.

“We don’t need brand ambassadors, but we need adopters who can make a change,” says Dinesh Nair, Sub-Regional General Manager West & South India, Lenovo India.

Major barriers

Listing major barriers to PC adoption, Dinesh says while touch has changed the way devices are used, PC industry is still lagging in that.

Affordability

Dinesh says most growth for PCS comes from Tier 3-4 cities. While the PC pricing has come down, there aren’t many encouraging finance options available. 

Lack of awareness

Currently, PC is not on the priority list of people. “But be it a student or an entrepreneur, many speak of its aspirational value. Hence a lot relevance can be built if one can consistently advocate as what technology can do to businesses, to children,” he says.

At local level, SMBs are doing a lot of manual work. So PCs can help them ease work through automation. There is a need to create awareness, he says.

The silver lining

Looking beyond the near term, IDC remains optimistic a modest recovery should come in 2017, when the prospect of the next refresh cycle and the cessation of a free Windows 10 upgrade should provide opportunities in notebooks and commercial segments. In emerging regions, where consumer budgets have been divided across a myriad of devices, PC purchases are also expected to regain some interest.

“Although the shortcomings of the PC business are obvious, a silver lining is that the industry has continued to refine the more mobile aspects of personal computers – contributing to higher growth in Convertible & Ultraslim Notebooks,” said Jay Chou, Senior Research Analyst, Worldwide PC Tracker. 

Speaking in specific to Indian market, Kiran Kumar, Research Manager, Client Devices, IDC India, said: “Various announcements and initiatives made by the government on boosting economic growth had positive impact on the sentiments of the business community; however in order to sustain this buoyancy it is vital that implementation of reforms continues at a steady pace.”