How has the transition from IBM to Lenovo been in the last few months?
It has been a lot of work, but actually it seems to have gone pretty well. We basically didn't miss a heartbeat in terms of the day-to-day running of the business, from being IBM one day and Lenovo the next. That has been the majority of our focus until today — making that transition as seamless as possible, so that we maintain the business we have. I'd say we have been pretty successful, unlike some mergers we have seen where the combined market share has dropped as a result.
Has all the infrastructure and staffing remained the same — has there been any headcount loss, for instance?
There has been no headcount loss and at the moment we are retaining the same offices but that is something that will probably change. Now that we have finished that transition the focus is now looking forward to the future and how we combine the skills of both sides and get operational efficiency out of that combination.
Where do you see that future exactly, given IBM's business-focused heritage and Lenovo's consumer pedigree in China?
We now have the ability to take the strengths of both sides and put them together in one offering. Our aim is to continue to do the business we are doing, that is the enterprise and mobile business and the 'Think' products that we have, but then to bring alongside that new Lenovo products to help us get into a new set of markets. It is not inconceivable that in the future you will see us offering consumer products. We don't have a date for that yet, but the opportunity is there for us.
Is there not the danger that on the enterprise side you will lose some of the benefits of being connected to the rest of IBM, in terms of being able to offer servers, infrastructure and services etcetera?
We do have an alliance agreement with IBM, we are still the PC element of IBM's solutions and we are sole supplier of PCs to IBM — they won't be doing PCs with anyone else, and that's an alliance that will be in place for five years — that way we don't lose too much of that synergy. We also tried to keep as many things the same as possible for our customers — the same account teams, the same relationship with IBM, the same products, the same research and manufacturing. It was very much about making it a seamless transition, which I think we have achieved.
What are your plans for the next six months and what kind of targets are you setting yourself in terms of expanding the brand and the business?
The first part is continuing to do what we do and not take our eye of the ball. But we are going to add to that, which will begin early next year when we bring out a set of Lenovo branded products. We will maintain our Think products but will introduce SME-type products as well as some that allow us to operate in price-cells we haven't done before. There is a low-end notebook market that we just don't compete in today with our Think products — with our Lenovo products we expect to be able to do that from the beginning of next year.
It still sounds like a very wide-ranging business plan, from consumer to large enterprise. Do you not think it would be more effective to specialise in one segment?
We believe we can cover a wider spectrum because we have these different focus areas — from IBM enterprise products to Lenovo consumer and SME products. The bit we are working on now is how do we do that — how we enable the channel to do that? How do we focus the right resources across those two areas?
How long do you intend to maintain the various IBM brands you have inherited?
The IBM brands could stay with the Think products for up to five years, but we expect to start moving away from that at the end of next year. The strategic alliance with IBM is five years and that also covers things like warranty provision and customer leasing and financing.
What kind of work have you done in putting the Lenovo brand out there to IT purchasers in the UK and elsewhere?
Our message since September has very much been about everything staying the same. The primary brand that is being put out at the moment is around ThinkPad and ThinkCentre but you can expect that to change now that the transition is complete. You will start to see more of the Lenovo name particularly around product launches. We are also tying into it our sponsorship of the Winter Olympics which is in February next year. So you will see more but so far it has been one-on-one or word of mouth.
In terms of technologies, do you see any new or emerging technologies that will be an important part of your strategy in the near future?
Well one is the X41 Tablet which we announced in June this year. You might say that we are a little late getting to the market with a tablet, but when we did it we brought out something that is the thinnest, lightest, has the longest battery life — the most highly rated tablet in the market. Another one is the announcement we made today around the Z60, which has more multimedia features than we would have put onto our machines in the past. As far as the digital home [goes] — Lenovo has those products and we expect to introduce them next year and they are already selling as Lenovo products in China. We have some fantastic-looking home entertainment systems, VoIP phones and wireless connectivity to digital services. All those things are there for us; it's just a case of adding them to existing lines.
