BIZCHINA / Yang Yuanqing
Lenovo goes global with new PCs
By Andrea Tan (Bloomberg)
Updated: 2006-03-01 08:33
Lenovo Group Ltd said costs will increase this year as the company begins
selling computers under its own brand to grab share in the small-business
market from larger rivals Dell Inc and Hewlett-Packard Co.
"There'll be an increase in marketing costs, but there's going to very
little cannibalization" on our sales, Andrew Sotiropoulos, vice-
president for Asia Pacific, said at a media briefing in Singapore on
Monday. "We are driving more revenue through the increase in spending."
Sotiropoulos declined to provide specific figures.
A Lenovo employee displays a laptop at the China International high-tech
exhibition in May 2005. China's largest computer maker launched its own
brand of computers in the Asia Pacific region, signalling its intentions
to grow the Lenovo name outside its home base. [AFP]
Lenovo, the world's third-biggest personal-computer maker, last week
started selling its own-branded computers outside China to gain market
share, the first time since buying International Business Machines Corp's
(IBM) PC unit.
The Purchase, New York-based company is also building name recognition
through an Olympic sponsorship until the 2008 Games in Beijing.
"Pushing into the consumer space is pricey, with costs associated with
marketing and brand awareness," said Bryan Ma, a Singapore-based
associate director at researcher IDC. "The challenge is compounded for
Lenovo as it's not widely known outside of China."
A security guard walks infront of the Lenovo headquaters in Shanghai,
August 10, 2005. - Lenovo Group Ltd., the world's No. 3 PC maker, will
soon start selling low-priced computers targeted at small U.S.
businesses, taking the Lenovo brand outside China for the first time,
said an analyst familiar with the matter. [Reuters]
IDC expects computer shipments in Asia's small-business market to gain 11
per cent annually until 2009, from an estimated 6.7 million units in
2006, Ma said.
Lenovo had a 4 per cent share of the small-business market in Asia in the
12 months ended September, Sotiropoulos said. Small businesses account
for about 40 per cent of PC shipments in Asia, he said.
"You don't have to be a mathematical whiz to know that if we do well in
the small-business segment, we do well overall," Sotiropoulos said in an
interview.
Before February 23, Lenovo sold only products inherited from IBM, such as
the ThinkPad notebook targeting large and mid-size businesses, outside of
China.
"In its legacy as IBM, we did not do very well" in the small-business
market, Sotiropoulos said. "For very practical reasons, we need and want
to do better" in this market.
Lenovo bought IBM's PC unit for US$1.25 billion in May 2005 to stave off
competition from Dell and Hewlett-Packard, the world's two largest PC
makers.
(China Daily 03/01/2006 page11)
Most Popular Stories in 48 Hours
� Surges in processed oil prices continue
� China raises retail oil prices
� Chains dominates catering
� China processed oil prices up
� Global copper price may calm down
Today's Top News
� China boosts processed oil prices, subsidies promised
� Gas leak forces 5,000 to evacuate
� China to issue $5bln worth of T-bonds
� IKEA founder proud to be frugal at 80
Top Biz News
� Surges in processed oil prices continue
� Share-merger reform enters crucial period
� China c.bank sees GDP growing 8.9% in 2006
� China's tax burden lower than world average
� China processed oil prices up
Learn Chinese online
