Shifting Focus On Smart Connected Devices
Lenovo, the world’s leading PC maker has ventured into smartphones over the past several months and also seen a jump in its sales and profit in smartphone segment in the last two quarters. But the question remains will it be able to take over the market share of behemoths like Apple and Samsung in the days to come? In an exclusive interaction, Sudhin Mathur, Director, Smartphones, Lenovo India discusses the company’s plans for its smartphone business for the next one year.
Lenovo CEO had said he wanted to raise 50% of company revenues from smartphones and tablets, how are you planning to shift this focus in India?
While the PC market still offers substantial opportunity for profitable growth, much of the new growth is expected from the PC Plus market, which includes tablets, smartphones, smart TVs, other “smart connected devices” and the broader portfolio of cloud services and infrastructure hardware, such as storage and servers. Lenovo is aggressive about all form factors—smartphones, tablets and convertibles — which are a part of our PC Plus strategy. For the first time in Q1 FY13-14, Lenovo sold more smartphones and tablets than PCs worldwide. Lenovo’s revenue from mobile devices, which include smartphone, tablet and smart TV products, accounted for 14% of the gross revenue in the first quarter of 2013-14, up from 7% year-over-year.
Lenovo is expanding the focus beyond market share to driving innovation and PC Plus leadership in emerging markets, including India. We will expand our portfolio with new models and frequent upgrades to create an impact in the Indian market.
What are your expansion plans in India in the next one year?
Lenovo India is focusing on top 69 cities in the country, as they hold potential for growth of smartphones sales. We are aiming at availability of Lenovo smartphones through large and small retail format outlets, operator channels and IT channel partners as well as online channel partners. By the year 2014, we will extend our reach to tier 3 and tier 4 cities across the country. Lenovo India has partnered with top national distributors, such as Ingram Micro and Advance Computers, who understand the Indian market and can connect our consumers with the appropriate products. We have been able to reach more and more consumers across the country, including the tier 2 markets, through our retail network of 1200 Lenovo Exclusive Stores (LES) and other leading multi-brand stores and Large Format Retail (LFR) stores namely Sangeetha , Univercell, Croma and many more. Lenovo India will continue to strengthen the retail channel network; increase the number of exclusive retail stores and invest in brand and talent acquisition.
Lenovo recently launched premium smartphone Vibe X, how do you see disruption in the smartphone market in terms of high end smartphones?
The Indian smartphone market has emerged as the third largest smartphone market in the world (Strategy Analytics) and it is growing at over 150 percent annually, with Tier I and Tier II cities expected to fuel the boom in the next one year. In India, smartphones have seen 229 percent growth YoY. The market is expected to more than double over the next four to five years. The need for youth to stay connected and usage of social networking sites on mobile is on the rise. Vibe Series is our major step into the premium segment and we are confident of grabbing attention of the urban youth, who are looking for style and functionality in their handsets.
What are the key technological changes do you see in the smartphone segment?
According to IDC tracker, the strongest growth segments were devices with a large screen size, phablets, ranging between 5 inches and 7 inches. In fact, phablets accounted for 30 per cent of all smartphones shipped in the 2nd quarter of 2013. Overall, the smartphone market is 10% of the total handset market where we expect feature phone users to migrate to smartphones eventually. At Lenovo, we are excited with the opportunities that exist in Indian smartphone market and intend leverage the potential.
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