YOKOHAMA, JAPAN--The creator of the ThinkPad sees Apple as a "good competitor", but is unafraid of Cupertino and aims to lure customers who are considering Apple products toward ThinkPad devices.
Asked about his views of the U.S. company during a media briefing here Tuesday, Arimasa Naitoh, chief development officer for Lenovo's product group, said: "I'm not ignoring Apple but I am not scared of it."
He expressed interest in using new Apple products and described the American company as a "very good competitor to work with".
Naitoh, who has been credited as "the father of the ThinkPad", acknowledged the ThinkPad commercial laptop unit was more conservative in design when compared to Cupertino. That said, his team wants to lure customers who are considering Apple for their next purchase, he revealed.
The executive also admitted the ThinkPad team is not good in making "radical improvements", although it is good at "incremental improvements" by addressing users' painpoints with each new product.
To improve the team's ability to make more radical improvements, Naitoh said he told his team not to focus on today's technology but to imagine and design technology that will be used in five years' time.
As of last week, the executive received 217 new ideas from his team. He believes he will have about 400 new ideas to date, and will need to sieve through them for new breakthrough ideas. The results from these will only be seen in 3 to 5 year's time but Naitoh hopes to change the team's design capability by then.
Tablets need to improve
Asked if he sees tablets cannibalizing PC market share, Naitoh said the total volume for both devices is still growing.
While some tablets may grab a little of the PC market share, they are not eating into that of the laptop segment, he noted, adding that the tablet is just one of the business tools a businessman may use.
However, he stressed the need for improvements to be made in today's tablets. He said Lenovo aims to develop a tablet that can be used by business executives during a two-week work trip without the need to bring along a laptop.
While Microsoft will be releasing its Windows 8 operating system that can be used on tablet and desktop devices, Naitoh believes as long as apps can be controlled using the keyboard and mouse, the touchscreen capability will not be fully utilized.
He added touchscreen devices will take off when the cost of building such products is lower. Only until more touchscreen hardware is ready will Windows apps designed for touch be available, he added.
Hardware players need ecosystem of devices
Kevin Beck, senior worldwide competitive analyst for Lenovo customer centers, who was also at the briefing said it is not enough for hardware players to focus on only one "cash cow".
He pointed to Lenovo's foray into the smartphone, tablet and smart TV markets as examples of how the company is expanding its business.
Beck noted that computing devices are "no longer defined as 'compute-r'" but as an ecosystem of devices. The Lenovo executive was responding to queries on how the ThinkPad device can escape the fate of Research In Motion, where the BlackBerry maker had focused mainly on the enterprise market and lost out on the consumer-led smartphone growth.
While Lenovo is its the way to becoming the world's top PC vendor, its profit margin is much lower than competitors Hewlett-Packard and Dell. Data from Thomson Reuters put HP's profit margin at 7.4 percent and Dell's at 6.2 percent, while Lenovo's was behind at around 1.4 percent.
While Beck could not confirm the data, he countered that the company had been outgrowing competitors for 11 straight quarters. He added Lenovo faced a different challenge compared to the other two players which were "well-known around the world".
According to Andi Handoko, senior market analyst for client devices at IDC Asia-Pacific, Lenovo's resilience on operating the business on low margins might take the brand to the top. "But one wonders how long this will last," he said.
By taking the crown as top PC vendor, Lenovo would have the momentum to use its status to expand into more lucrative business portfolio such as smartphones, tablets and TVs, said Handoko.
"Taking the leadership position in the PC market would be more than a merely symbolic achievement for Lenovo, as PCs are the only product that have the global impact to draw attention to its brand," the IDC analyst said.
"As HP and Dell can confirm, a win in the PC market will not guarantee much in, say the smartphone market, and Lenovo will still have a lot to prove in these new markets," he said.
Handoko added the title of top PC vendor would present a challenge for Lenovo to remove the stigma of being recognized first as a PC brand. "Maintaining its hyper growth will be another battle for the company as competition is never far behind in geographies outside the home market," he said.