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Analyst: Lenovo Struggles in the Channel

Part of Lenovo’s North American sales slump can be blamed on a failure to engage the channel, said Leslie Fiering, a global computing and notebook computer analyst at Gartner. “The company is not selling enough product, that’s the bottom line,” Fiering said. “They haven’t demonstrated that they know how to use the channel. They recognize […]

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John Hazard

May 25, 2006

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Part of Lenovo’s North American sales slump can be blamed on a failure to engage the channel, said Leslie Fiering, a global computing and notebook computer analyst at Gartner.

“The company is not selling enough product, that’s the bottom line,” Fiering said. “They haven’t demonstrated that they know how to use the channel. They recognize that it is vital to develop the channel, but that has not happened… They’re behind on this, and I think they know it.”

Lenovo has failed to create the brand recognition and credibility necessary to do proper demand generation, she said.

“There hasn’t been enough high level marketing to keep it in the public dialogue,” Fiering said.

“When people didn’t hear buzz about it, they decided to take a wait-and-see approach. Resellers have other products, Acer, [Hewlett-Packard,] Toshiba, that have established ties with the channel and people demanding it. There’s really nothing to differentiate Lenovo. Why would you sell it?”

“The company is underspending on marketing,” she said. “If they want to increase revenue, they are going to need to increase demand generation and marketing. They need to get the product out there, and they need to get people to want it first.”

Lenovo in March launched a two-track channel—transactional and relational —to sell its low-cost 3000 Series and the more robust Think Series.

Much of Lenovo’s channel play this year has banked on the 3000 Series, low priced notebooks and desktops aimed at the SMB (small and midsize business) market.

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The vendor expected the 3000 line, which starts at $349 for desktops, $599 for notebooks, to make a splash in the market against competitors like HP and Dell, but resellers have maintained questions about quality and Lenovo has done little to appease concerns.

“They’ve really made it a drab piece of machinery,” Fiering said. “They expected the price to make it attractive, but Acer, HP, Toshiba, can compete on price. And there has been nothing from Lenovo to assure them the quality assurance remains the same. What is there to differentiate it?”

Analyst: Lenovo Struggles in the Channel

John Hazard

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