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King of Which Hill?

November 8, 2012

First, let me say that the opinions in this post are entirely my own, and not reflective of my company.  I’m talking about tech that I know from the past, but that I’m not involved in supporting today.

But I am talking about my personal favorite PC brand.  I’m a Lenovo fan.  The wonderful wife uses them for her business, and I always try to vector my PC that way when I can.  There’s something about the PC that keeps it running through stress… it “just works,” and if you dig far enough into any tech geek, they’ll finally admit that that’s the holy grail of any device.

So here’s what The Register has to say about the latest numbers.

If Gartner is right and Lenovo has indeed become the largest PC maker on the planet, someone forgot to tell the Chinese juggernaut’s top brass.

Talking at the release of Q2 numbers that showed a double-digit spike in sales and turnover, albeit slower than recent growth rates, CEO Yang Yuanqing seemed oblivious to last month’s controversial analyst report.

“With the strong execution of our Protect and Attack strategy, Lenovo has continued its strong and balanced growth momentum. Our global PC market share reached another historic high, moving us closer to our dream of becoming the worldwide PC leader,” he said.

There’s a psychological advantage to being #1 in terms of sales and consumer preference.  There’s also all the love you get from the market when you’re in the lead, but there’s a bigger advantage that comes from being on the top.

Back in the ’90’s when Compaq was the big wig in the market, they used to lead all the transitions to new technology.  If we felt that software was demanding a doubling of memory to enhance performance, Compaq would be the place we had to go to make the case.  You see, they were #1, so they got the best deals from the vendors.  If Compaq could drive a memory transition, or the addition of a new component to the board, the other vendors would likely have to follow suit, but at significantly less margin.  I saw Packard Bell go out of business that way, always chasing their larger competitor and not able to cut the cost curve fast enough.

So if Lenovo can clearly step up over HP, and keep Dell at bay, it’s got a market position that it can use, and a growing market share means the ability to drive transition.  Of course, Lenovo is also going to have to stay strong in other devices.  They have some aggressive tablet entries that they are transitioning into the PC area as well, and that’s probably attracting their user base.  This one will be entertaining to watch, and should give us a pretty good view of computing client strategies and winners.

4 Comments leave one →
  1. November 9, 2012 6:39 pm

    The challenge from the enterprise POV is changing market perception of Lenovo to one of a serious server/storage/network vendor, rather than someone you only buy PCs from. Even in China, this problem has to be addressed. I think the EMC partnership will help in this regard.
    (my statements are also not a reflection of my company’s point of view :))

    • November 9, 2012 8:09 pm

      I think the server problem is actually bigger… there are quite a few companies who won’t buy a server from China. The telecom companies are already down this path, though that’s more Huawei than Lenovo.

  2. November 8, 2012 10:12 am

    It’s amazing how fast Lenovo has gone from a 2nd tier PC vendor to the top of the heap. The growth rate has been astounding. Hopefully the enterprise business will repeat this success.

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