Lenovo Canada launched its first line of desktop PCs, notebooks and monitors without the IBM name since the acquisition of Big Blue’s Think-branded products more than a year ago.
The products are designed to complement the Think line of desk-tops and notebooks and will be specifically aimed at small-to-medium-sized businesses.
Peter Sutherland, business unit executive, channel sales for Lenovo Canada, based in Toronto, said the Lenovo 3000 line was created for the very small business customer whose company has one to 10 employees. “Our share (of this market) is in the low single digits and the Think products are well established as an enterprise product. For someone who runs a business out of the home, they are the ideal target. Lenovo 3000 has an affordable price and they like getting it from a small VAR,” Sutherland said.
Make up of the market
Small businesses make up 21 per cent of the commercial market and that segment is growing at 11 per cent a year in Canada, according to Evans Research Corp.
“Customers are shopping at local dealers and online to upgrade system technology to stay competitive. They are looking to reduce costs, while also looking for a brand, especially in notebooks,” said Michelle Warren, IT analyst for Evans.
Lenovo will be looking for VARs across the country to handle the Lenovo 3000 line as these products will be exclusive to the channel, Sutherland said.
It has between 600 and 700 registered partners, of which 15 to 20 are national resellers or larger regional players such as NexInnovations, Compucom CCSI, Metafore, Compugen and Acrodex.
“From there we have small VARs who do $50,000 to $100,000 per year. They will be able to resell Lenovo 3000 products in areas we are not covering today. They do a lot of SMB business. These VARs could double their revenue with Lenovo products. They have customers to which the Think brand is not suitable today and they might be selling Acer or a clone. The pricing will be good and they get legendary IBM quality,” Sutherland said.
The desktop models under the J100 series will start at $399, while the Lenovo 3000 notebooks under the C100 series will start at $799. The desktops will run both Intel and AMD processors, but the notebooks will be strictly Intel.
Greg Myers, vice-president of marketing for Tech Data Canada, said he believes Lenovo has done the right thing by releasing its own brand of PCs and notebooks.
He said the Think brand was not properly aligned to the emerging opportunity in the very small business segment.
“The new Lenovo 3000 is entirely complementary to the Think strategy. The last thing a great channel partner wants to see is cannibalization of the business. But it is clear this product set with its features and price will compliment Think and allow Lenovo to penetrate the low end of the SMB as well as the very small business space,” he said.
Tech Data is working on developing a program for the launch of Lenovo 3000 products to help Lenovo attract the broader channel it is looking for, Myers said. “Up until now, the channel has not been able to access the Lenovo products. We have an opportunity to offer the product set to a much broader set of resellers.”
Myers said he believes that 2,000 VARs will be able to cover the country for Lenovo. “When you get a million or so small businesses in Canada you need that type of coverage in small towns and in big towns,” he said.
The pilot
Lenovo 3000 will have competitive margins in the high single digits against other Tier One brands, he said.
“The days of double-digit margins have passed. Service attach rates are more important and PC margins are what they are. The opportunities for VARs – and the good ones have already figured this out – is attaching other products, services and consulting to drive up the value add,” he said.
Lenovo 3000 will also be available at CompuSmart locations and in a pilot at Staples in Alberta. Sutherland said if that pilot is successful, expect Lenovo 3000 products to be rolled out at Staples across the country.
