Lenovo has raised the prices of notebooks it supplies to the
public sector by 20% to compensate for swooping movements in
foreign exchange rates.
The move is a reversal of an earlier price commitment to public
sector customers under Catalist, the IT procurement framework run
by the Office of Government Commerce.Buying Solictions.
Lenovo is now offering notebooks under Catalist that are a fifth
more expensive after movements in foreign exchange rates meant the
deal signed months earlier was not profitable.
Vincent Fauquenot, Lenovo vice-president of transactional
business for Western Europe, said the company had been facing an
"exceptional situation" in the currency markets and needed to
ensure business was profitable.
"The UK has been moving against the dollar and some of the
programmes that we had in place were not sustainable," he said,
adding that some large corporate customers had also experienced the
same issue.
Lenovo partners have complained that rising prices for Small and
Medium Sized Enterprises could ruffle the feathers of customers,
but doing so in the public sector could be commercially
damaging.
"The deal was on such low margins that Lenovo realised it was
unprofitable, but when you make a commitment to the public sector
you stick with it," said one source, "Lenovo has lost a lot of
credibility so we have switched to HP".
Another agreed the supplier had been chasing market share with
prices that were too aggressive, "but it has backfired".
Fauquenot said it was listening to partners' complaints and
planned to "do everything possible in the coming months through our
product offering, programmes and incentives to restore confidence
among partners."
A version of this story originally appeared on
Microscope.