Despite the massive success of Apple’s iPad, Lenovo doesn’t appear too rattled by the company’s failure to capture the next PC paradigm first. “I think the industry likes to declare winners but the reality is the industry changes so fast,” says Peter Hortensius, president of Lenovo’s global product group. “And that change is happening so fast that the winners of today will be the losers of tomorrow, and the losers of today will be the winners of tomorrow. The reality is there will be somebody out there we haven’t even thought of in five years doing something cool and new.”
For Lenovo, the No. 1 PC maker in the world, the fact that Apple has already sold 100 million iPads is merely a sign of the unprecedented market opportunity for tablets. Yet there’s no doubt Apple has disrupted the ecosystem–Cupertino now sells more iPads than hardware makers sell PCs. The launch last month of Windows 8, Microsoft’s mobile-centric operating system, could give PC makers new hope in mobile. But the question still remains: Why didn’t Lenovo invent the iPad first?
“Well, if I knew that I might be living on a beach somewhere in a tiki hut retired,” Hortensius jokes.
For decades, Lenovo and other hardware manufacturers built huge PC businesses in partnership with Microsoft, which licensed software to these OEMs in order to establish a dominant market share. But that model has dramatically changed in recent years: Apple, due to its vertical approach of controlling both hardware and software, was able to create whole new industries–music players, smartphones, tablets. OEMs, dependent on third-party software makers like Google and Microsoft, watched helplessly as Apple took the lead in these new categories, leaving some to wonder whether that traditional software-hardware partnership model was becoming a disadvantage.
“Well, there are advantages and disadvantages to every model, ” Hortensius says. “If you look at our industry, there are some players that are very vertical. Some players have been successful with that model, and some players have frankly failed with that model. We think we’ve done quite well with the model that we have.”
Hortensius points to the fact that the traditional model has yielded higher market share in most cases, though it may take time in new markets. “Today, Android is the predominant operating system in phones, and Windows is still the predominant operating system in PC-like devices,” he says.
But Hortensius’ larger point is that it’s still incredibly early. Yes, Apple has dominated the tablet market, but Windows 8 is barely a month old. Lenovo’s business is growing–it just captured the top PC maker slot worldwide. It owns roughly a third of the PC market in China, and, only being No. 4 in the U.S., still has tremendous room for domestic growth. In other words, as Hortensius says, “It’s very easy to get caught up with the way the world is if you live in California. But the reality is, tablets in China are not nearly as strong.”
We’ve already heard similar arguments from HP, Dell, Acer, Toshiba, and others. But for Lenovo, it’s the company’s global footprint that will be its greatest advantage. As Fast Company reported in our profile of the company last year, Lenovo boasts a network of roughly 15,000 stores in China, almost as many as Starbucks has globally. “But if you go into the mainstream [U.S.] consumer space, it’s, you know, ‘Lenovo who?'” Hortensius says.
That’s changing. And despite Apple’s success, Lenovo thinks it has more than a fighting chance in mobile.
“I think the global view is that everyone got a little bit surprised by touch [technology]. We had touch devices, but the industry just didn’t connect the dots like [Apple],” Hortensius says. “The reality is that in our market, you still haven’t seen iPads take off in a huge way in China. If you look at where the industry is now, I think we’ve caught up. And if you look at the next wave of human interface technology–voice, gestures–I don’t think you’re going to see the industry getting surprised again.”
[Image: Flickr user Kevin Tiqui]