Lenovo is going after Dell’s education and government market share, and the Chinese-based multinational IT corporation is not shy about admitting it. In an interview with Bloomberg, Thomas Looney, Lenovo’s Vice President and Genernal Manager, said that Dell is the “weakest kid on the playground right now”, and Lenovo has made it a point to take advantage of that weakness.
Dell is strongly entrenched in the state, local, and federal government, as well as K-12 markets, and Lenovo is actively and aggressively targeting Dell customers in those areas. The company’s hope is to set prices low enough and offer the right products to get ahead of Dell. It is all part of Lenovo’s policy of protecting is core market but also seeking to attack new ones.
While much of the PC market has stumbled through the recession, Lenovo’s revenue growth was posted at 44 percent in the first quarter. The rest of the computing industry was nearly stagnant at 2 percent.
It is HP, not Dell, that long held the top spot for PC sales, but Lenovo systematically picked apart the company’s market share piece by piece. Analysts now expect Lenovo to overtake HP before the year is finished. Lenovo seems to now be shifting focus and preparing to take on Dell next.
“Dell is highly penetrated in the K-12, federal, state and local. That’s why I’m attacking now in those segments of the market. I can price very aggressively, and I’ve got the right products,” said Looney.
Despite the company’s optimism, Lenovo does have some hurdles to overcome. Tapping into the federal market, particularly in the U.S., may be difficult for a Chinese company. State, local, and even school markets, however, might be easier than one might think, especially if Lenovo is willing to accept smaller margins in order to win competitive bids.
As the story continues to unfold, it is becoming more likely than ever before that Lenovo may end up on top. If and when that does occur, Lenovo will turn its attention to Apple and the tablet market.
