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By | Paul Kunert 13th July 2012 15:01

Lenovo: Hey just relax, Gartner – we can flog this stuff

'We won't repeat Acer's 2011 mistakes'

Lenovo needs to keep a close eye on inventory levels in the channel or risk heading down the same road to ruin that destroyed Acer's 2011, temporarily derailing its plans to become top dog in the PC arena.

As revealed yesterday, the high-flying Chinese PC maker is within touching distance of HP, the world's largest shifter of boxes, after putting to bed a strong Q2 – the eleventh consecutive quarter of double-digit growth.

Ranjit Atwal, research director at Gartner, said that in terms of sales into the channel - stock sitting on distributors' shelves - Lenovo has "massively outgrown the market".

He said the vendor needed to focus on sales-out to consumers and businesses to keep on top of inventory, "it has to be careful that inventory doesn't become excessive".

Rival Acer kept shipping product at the same volumes despite a collapse in demand from Q3 2010 and has learned from the costly lessons of the recent past.

Former Acer CEO Gianfranco Lanci is currently EMEA president at Lenovo. Atwal said: "Given the guy in charge, I doubt he will repeat his mistakes, but given the downward trend in the market, Lenovo has got to be careful."

Distributors too will be mindful too of the financial implications of taking on aging stock that may need to be price-protected (should it age out of relevance).

Darren Phelps, Lenovo's SMB and channel director for the UK and Ireland, told The Channel the company was in sync with distributors in terms of sales out, weeks of inventory and the age percentage of stock.

"When we closed off the quarter we had four to four-and-a-half weeks of stock, no more than 10 per cent older than 45 days, whereas distributors' target is 60 days. I'm happy with things," he said.

The vendor has a number of SME promotions running in the channel but Phelps said: "We price to the market. If the market is aggressive we react. We will not be unnaturally aggressive." ®

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