Lenovo president EMEA: Two per cent margin for PCs is successful

By Sooraj Shah
08 Feb 2013 View Comments

A two per cent profit margin is 'success' for a PC manufacturer, according to Lenovo's president of EMEA, Gianfranco Lanci.

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"Worldwide we're running at around two to 2.5 per cent in profits and in EMEA we're at around 2.5 to three per cent. In the last quarter we were also profitable on smartphones and tablets which was an area that we weren't profiting from for a few years. We plan to grow from 2 and 2.5 per cent profits to 3 to 3.5 per cent profits in the next 12 to 18 months," he said.

Lanci is the former CEO and president of Taiwanese firm Acer, and is now focusing all of his efforts on what is deemed by research firm IDC as the second largest PC company in the world, Lenovo.

His relationship with his ex-employer deteriorated over several months leading to Lanci resigning in March 2011.

"On the company's future development, Lanci held different views from a majority of the board members and could not reach a consensus following several months' of dialogues," Acer said at the time.

Last year, it was announced that Acer would take legal action against its former CEO for breaching a non-compete clause in his contract, by joining Lenovo as a consultant in September.

But amid troubles with his past employer, Lanci is keen to exert his leadership qualities at his current firm.

Riding out the tough times

Unlike most PC makers in the current climate, Lenovo has managed to increase sales, by 8.2 per cent in the fourth quarter of 2012. It succeeds by focusing on growing emerging markets and using aggressive pricing, leaving it with razor thin margins.

Lanci stated that Lenovo's current target was to gain a higher market share of the smart devices market (PCs, tablets and smartphones), a market in which it is currently placed third after Samsung and Apple.

"We need to gain more market share in this area. The traditional PC makers are far behind us in this area for two reasons: one is clear prices but also in terms of innovation," Lanci claimed.

The former Acer chief believes that it is the way that Lenovo is run that gives it an edge, particularly its mix of cultures, presumably making a dig at his old firm for being "Taiwan centric".

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