Lenovo Channel Chief Kinlaw: Chrome Isn't Going To Be A 'Huge Priority' For Us
Lenovo North American Channel Chief Sammy Kinlaw said the vendor plans to invest in the non-Chrome areas of its personal computing business to better drive profitable growth.
"You can't keep these flat lights on and pay salaries selling Chrome," Kinlaw told the nearly 500 people attending Tech Data's Channel Link event on Thursday. "We're going to continue selling Chrome as an accommodation factor, but it's not a huge priority."
Unit sales growth in the Lenovo business group that includes Chrome has greatly outpaced the division's revenue growth, Kinlaw said at the Gaylord National Resort & Convention Center in National Harbor, Md.
Kinlaw said Lenovo's North American channel had seen a 20 percent year-over-year increase in units sold through its TopSeller division – which includes pre-configured products such as Chromebooks – but just a 10.5 percent increase in the division's revenue.
"I'm all about selling more units year-over-year," Kinlaw said. "But what's more important to us as a company right now is revenue growth."
Lenovo's personal computing division therefore plans to focus more heavily on selling premium laptops, Workstations, desktops and services through its channel partners, according to Kinlaw.
"Is Lenovo moving away from Chrome? No," Kinlaw said. "But we're doubling down in investments in other parts of the business."
Kinlaw praised Chrome for opening doors by providing a platform for ancillary product revenue as well as an upside for additional services that can be jointly sold between the vendor and its channel partners. He said Chrome has been an "explosion" for Lenovo for two years running.
"We want that [Chrome] business; we don't want that business to leave us," Kinlaw said. "But you can't just sell Chrome."
Lenovo now enjoys 15 percent PC market share in North America, Kinlaw said, putting the company in a solid third place. The company had PC market share of just 3 percent in the region in 2010, Kinlaw said, and has seen its market share grow by roughly two percentage points each year.
Lenovo is looking to notch 20 percent PC market share in North America to get the region closer to its worldwide figure of 22 percent, Kinlaw said.
"One thing that's slightly changed over the course of this year is the type of growth we're looking for," Kinlaw said. "I'm wanting to drive some profitable growth."
Tech Data will be key to Lenovo's North American growth since it’s the vendor's largest distributor in the region. The Clearwater, Fla.-based distributor accounts for more than $1 billion of Lenovo's $5 billion of North American channel sales, Kinlaw said.
Tech Data is also the largest distributor in Lenovo's $1.6 billion North American small and midsized business (SMB) segment, Kinlaw said. The nearly 300 Tech Data resellers attending Channel Link have grown their business with Lenovo by 60 percent over the past year, Kinlaw said.
Lenovo isn't just looking to grow in devices, though. Kinlaw said he's being asked to accelerate services growth in his portfolio from 8.9 percent last year to 30 percent in 2017.
To do that, Kinlaw said Lenovo needs to widen its services offerings in the partner community and focus more on accidental damage protection and affordable extended warranties.
Paragon-One Group has been looking to do more with Chromebooks given the high level of demand in the K-12 education vertical, according to Toni Hines, CEO of the Gaithersburg, Md.-based company. Hines hopes she can continue receiving quality support around the Chromebook from Lenovo.
"If you're selling to education, you want something that's affordable," Hines said.
Hines was pleased to hear that Lenovo plans to redouble its efforts around the Workstation since the high-performance devices are popular with federal government customers.
MHD Enterprises primarily buys tablets and laptops from Lenovo, according to CEO Dari Dadashi. But the Austin, Texas-based company's Chrome business is lower in volume since their customer base isn't asking too much for it.
"If they focus less on Chrome, that's probably okay with us," Dadashi said.