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Q&A | Shailendra Katyal, director, consumer business, Lenovo India

As a number of Chinese companies, like Huawei, Gionee, and most recently, Oppo, enter the Indian market with a wide variety of cellphones, Lenovo, which has been a fixture in the PC market here for seven years, is now reinventing its mobile brand.

It entered the mobility segment with a range of smartphones, but the reinvention under the Vibe sub-brand, coupled with the recent acquisition of Motorola, is indicative of the churn.

Shailendra Katyal, head of Lenovo India’s consumer business division in mid-2013, talks about building brands, and going from laptops to smartphones. Edited excerpts:

How will the acquisition of Motorola affect the India business?

At a country level I can’t really say, this has been a global decision and it’s obviously not just an India-specific move. However, as an observer, I can tell you that my belief is that this will give Lenovo a strong presence in markets where we weren’t present earlier. In terms of branding, it’s hard to say. Lenovo started in China, then India, and is now there in 20 countries. Motorola’s distribution channels are much bigger. This will also bring in some patents to the company. Overall, Indian buyers probably won’t get affected much, I believe.

In recent months you’ve launched the Flex line (laptops), the Yoga line (high-end laptops and tablets) and cellphones. In all this, how is the PC brand faring in India?

Lenovo started in India in 2007 right after the IBM PC business acquisition—and for a long time we’ve had no consumer presence beyond ThinkPad. But in the last year, the market globally and in India has developed and needs more than just the ThinkPad. Right now, Lenovo has a presence in four main verticals—there’s the consumer business, which I head in India, which includes our PC business, and also tablets, both Windows and Android. Then we have the SME or small-scale businesses, our enterprise business, and our newest business is in smartphones. Each of these are very important for us right now, and consumer business and smartphones are growing fast and meeting our goals right now.

In India, we’ve been consistently No.3 or No.2 for the last one year in the PC and tablet business, and for the last three quarters we’ve been No.1 globally. This is something we’re going to keep building on, and we’re also going to give a lot of focus to smartphones.

And in terms of hybrid computers—how successful has that been?

Hybrids have met our internal targets, we are happy with the numbers reached by the Yoga. It did what we had expected. Earlier, no one would have thought that people would spend around 90,000 for a Lenovo product. The bulk of our business remains at a much lower price point of course; the hybrids were a 1% category last year, at a very high price point. But we’re launching more products in the category at lower prices and we’re expecting to see more excitement this year.

Is there a concern that the Android tablets you’re selling will eat into your PC business?

Actually no; we see the Android market as supplementary to the PC market. Usually, a tablet is an incremental device in the household, so typically the first gadget people buy is a PC, and then they’ll get a smartphone and after that they will consider a tablet. So tablets are not directly replacing PCs.

What is happening though, not based on a proper study but what I personally think, is that the refresh has been pushed back by one more year—typically, Indians wait longer than many other markets to buy new devices anyway, to get the most value out of their products. And now, people are buying tablets, and waiting one extra year to upgrade their PC hardware.

In India, most people know Lenovo as a PC brand, not as a mobility one. What do you think will make a difference here?

India is still an emerging market, and assurance and the service experience are very important factors. Specifications and design are something everyone can put up—we obviously want to deliver the best possible products, but beyond that, we have to deliver on trust to win the market.

Earlier, Lenovo had outsourced a large part of the service, but as part of our strategy in India, we have heavily invested now to bring this into Lenovo and build our own reach.

In terms of brand perception, India has a few global brands, and lots of local players. The market isn’t right for small offerings now though—Samsung and LG built themselves from being seen as Korean brands into strong franchises, and I think that Chinese brands like Lenovo will follow a similar path and help the market grow more structured.

As for Lenovo specifically, there’s a sea of sameness, and our strength is hardware. We’ve invested heavily in design as well, instead of focusing only on the practical side of engineering, and that’s also yielded benefits—for example, with the Yoga tablet, we gave the cylinder design because we wanted something to improve ergonomics, but the result was that we were also able to give great battery life.

Speaking as a customer though, I have to say that the product names are just getting more confusing. Earlier you had ThinkPad and then its series, then you also had a Yoga name, and now you can buy a ThinkPad Yoga Flex computer.

We have been growing quickly and it has made it a little difficult in this time of change, and you’re certainly not the only person to have felt this. We’ve gotten this feedback from our buyers as well, and we will be responding to this.

The question is where the focus is. So for example, the Motorola deal which was just announced, how will those devices be branded. The thought is that it might be sold as Motorola by Lenovo, but it’s not clear right now what will eventually be decided. There’s a product brand and a corporate brand, and in India we gave a lot of importance to the corporate brand, Lenovo.

Now, we’re looking at building sub-franchises for device lines—something some of our competitors have been able to do successfully. So right, in the PCs, you have the A series and B series, which will be discontinued. Instead, we’ll have the Yoga line, for the high-end, high-design products, and Vibe will be the identity for mobile. Flex will become the face of more mainstream products. Five years down the line, Flex might not exist, but we’ve been taking this very seriously, and testing names with customers globally, and will definitely be simplifying our offerings.

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