Lenovo set for global push of branded PCs

Doug Young

LAS VEGAS: Lenovo Group Ltd., the world's third biggest PC maker, said it is gearing up for a major global push for its notebook PCs, including the introduction of the Lenovo brand outside its home China market.

The drive would come as Lenovo, virtually unknown outside of China, seeks to establish its namesake notebook PCs as a mid-tier global brand following its purchase of IBM's PC business last year for $1.25 billion, Peter Hortensius, senior vice president of notebooks, told Reuters.

He said the sales drive will begin in earnest next month around the time of the 2006 winter Olympics in Italy, for which Lenovo is a sponsor, and could include placing Lenovo-brand notebooks in some U.S. retailers that sell to small businesses.

Lenovo wants to sell more of its computers to small- and medium-sized corporate clients, and its new campaign would see it selling IBM's former ThinkPads as a premium product, with the Lenovo brand aimed at more cost-conscious customers, he said.

"You should see us gain traction in both brands over the course of this year," he said in an interview on the sidelines of the Consumer Electronics Show, the world's biggest consumer electronics show that is being held this week in Las Vegas.

"This year is a building year for (the Lenovo) brand."

Lenovo, a domestic heavyweight with about a third of the China market, rocketed onto the world stage last spring with the IBM purchase, making it the world's fifth largest notebook computer seller overnight, with 8.2 percent global share in 2005's third quarter, according to International Data Corp.

It still trails industry leader Dell, which had a 17.6 percent share, Hewlett-Packard at 16.6 percent, Japan's Toshiba at 11.3 percent, and Taiwan's Acer Inc. at 10.1 percent, according to IDC.

The global notebook PC industry grew about 26.7 percent to 59.8 million units sold in 2005, with another 14.4 percent growth expected this year, according to Merrill Lynch.

By comparison, the more mature desktop PC industry grew 9.1 percent to 148.6 million units last year, and is expected to grow at a slower 5.3 percent this year, according to Merrill.

Lenovo was the world's third-biggest PC seller in the third quarter, with 7.7 percent of the market, behind global leader Dell at 18 percent and Hewlett-Packard Co.'s 16 percent, according to IDC and Gartner.

Chairman Yang Yuanqing told Reuters last month he expects to significantly boost the company's global share in the next few years by placing more emphasis on smaller clients.

The company now has a global notebook PC market share of 20 percent for large corporate clients, well ahead of its 12 percent for medium-sized clients and 7 percent for small ones, according to IDC.

By diversifying away from its traditional focus on big corporate customers, Yang said previously, Lenovo hopes to expand its global notebook business at twice the industry rate.

"Certainly as we get all the items ... firing on all cylinders, that's been the goal that our chairman has put us towards," Hortensius said. "That'll be a big test for us."