Much of Lenovo India’s growth has been powered by its spectacular performance in the mobile handset business making India one of the biggest markets in the world for the company. Much of the India success can be attributed to the localized GTM strategy and the company’s ability to segment its mobile handsetMotorola and Lenovo branded devices and coupled with an excellent pricing model did the trick. Lenovo is very good at managing multiple devices in its portfolio. The lineage comes from managing IBM’s PC and server assets and having its own PC and Systems portfolio. But Lenovo still is able to manage the IBM’s Think range and its own system device portfolios. The same approach in mobile business helped Lenovo in India to create a blended strategy.
If we take a global look, the company’s PC and Smart Devices (PCSD) business group, which includes PCs, tablets and smart devices, Lenovo’s quarterly sales were up 4.9% year-over-year to $6.7 bn in Q4 FY 17. For the full year ended March 31, 2017, Lenovo’s PCSD sales were down 2.3% but beating the overall market, at $30 billion.
In the Mobile Business Group ( MBG), which includes Moto and Lenovo-branded smartphones, saw 19.7% revenue growth in the fourth fiscal quarter outside of China, with total sales of $1.7 billion. Fourth quarter smartphone shipments increased 17.4% to 11.3 million units outside China. For the full year ended March 31, 2017, overall sales were down 5.4%.
In Asia Pacific and Latin America, success was led by India and Brazil respectively, Lenovo’s mobile business continued to improve throughout the year.
In its Data Center Group ( DCG business), which includes servers, storage, software and services, fourth fiscal quarter sales were down 13.7% year-over-year, to $850 million. For the full year, revenue decreased 10.6% on total sales of $4.1 billion. The company said that it has re-engineered this business by adding new leaders including industry veterans, deploying a dedicated DCG sales force in all geographies, and forming new segments to focus on growth categories such as highperformance computing.
In Asia Pacific, Lenovo’s sales were 18.1% of the company’s total worldwide sales during the fourth fiscal quarter, and 16.3% for the full year. Consolidated sales in the fourth quarter increased year- over- year by 9.4% to $1.7 billion and for the full year decreased by two % to $ 7 billion.
In 2016, Lenovo received 57 awards at IFA Berlin, and in 2017 it received 30 awards at Mobile World Congress and 62 awards at the 2017 Consumer Electronics Show for its forward-thinking design. It also won some of the industry’s highest accolades for product innovation and design, including 18 Red Dot Design awards and 6 iF awards.
WE WANT TO BE CUSTOMER CENTRIC IN EVERYTHING WE DO
What is your appraisal of FY 17 from an industry and Lenovo’s perspective?
In the last year, Lenovo has delivered solid results globally, through a series of innovative product launches across the portfolio and strengthening the business fundamentals. The industry in India has undergone transformative changes in the past year, with several government initiatives influencing market conditions. For instance, while demonetization did slow down business for us in Q4, the pace of consumption did get back on track during the next quarter. The Union Budget, on the other hand, has provided a much-needed impetus for digitization across the public sector and rural areas, through the Digital India and DigiGaon initiatives. This has created an increase in adoption of technology across the country, from sections of the country that were previously apprehensive of embracing technology. We made good progress on Tablets- moving to second position in the market as we exited the last financial year. In a nutshell, the past year has been a dynamic one and has placed us in an advantageous position, to boost business growth.
What are the 2 big challenges that took most of your management time during the last fiscal?
One of the key challenges that we had identified in the past was that our customers were looking for a more streamlined and efficient system for after-sales service. Realizing this challenge and concentrating our efforts on redefining our aftersales service, has been one that has held the management’s focus. We have subsequently opened up various avenues for our customers to connect with us over multiple channels, i.e. Twitter, apps and call centers. We also unveiled a ‘Quick Response Time’ program to map onto improvement in addressing our customer inquiries.
How would you place Lenovo in India given the disruptions happenings in the tech space?
Lenovo is well poised to tap the potential within the Indian market, given our strong focus on innovation. We have been unveiling a series of well thought through products, aligned with customer demands, due to the customer centric nature of our company. For instance, Gaming has been one of the niche avenues that we have opened up given the increased market demand. We truly believe that our growth will largely be defined by our unique ability to tap into the mind-set of the market and adapt with product offerings that redefine tech usage for the consumer. The diversified product portfolio in Tablets has helped us to significantly grow in the Tablet market. We are the first movers in Multi-modes, with our award winning Yoga line of products.
What would be the direction for Lenovo India in FY 18: the key focus areas and the growth drivers and your Industry outlook?
Most importantly, we want to be customer centric in everything we do. We listen to users and bring their voice into the product development process. Our role is to ensure that the voice of our customer is heard- to collect insights and figure out how we feed that into our products and offer a richer visual experience to our customers. We want to be #1 in 2 years in the PC and Tablet market. We want to be the leader in after-sales service. We are also focused on working along with the Government in our aim to becoming a truly digital economy post the GST roll out, we are looking to address the computing needs in the SMB segment. We will continue to innovate and provide people with richer, and more Immersive experiences.
—RAHUL AGARWAL MD & CEO
Source: DQ estimates revenue (`crore)