Lenovo to take home model overseas
By Liu Baijia (China Daily)
Updated: 2006-09-19 11:21
Lenovo's international business is mainly based on its Think brands acquired
from IBM in 2004, but the Think products are considered premium while its
strength lies mainly in so-called relationship customers.
In the second quarter Lenovo's shipments of computers rose by 12 per cent
year-on-year, but it was mainly driven by growth of almost 30 per cent in China.
In Europe Lenovo's shipments fell by 12 per cent and in the United States its
growth was 5.3 per cent, below the industry average of 6.7 per cent, according
to research company International Data Corp (IDC).
Advani said the major factor behind this was that Lenovo does not have a
strong presence in the fast-growing small and medium business and consumer
markets of Europe and the United States.
IDC predicts the worldwide growth rate of PCs in the consumer segment will be
12.6 per cent this year, while the commercial sector is expected to grow 9.3 per
cent. In the US market it is 8.5 per cent versus 4.9 per cent.
Thus, one of Lenovo's key strategies to revive its international business is
the duplication of its transaction model.
The world's third-largest computer maker has more than 2,000 resellers and
service facilities in more than 1,000 Chinese cities, which allows Lenovo to
reach small and medium businesses and consumers in almost every corner of China.
In contrast, competitors like HP and Dell mainly have a presence in big and
medium cities.
On Thursday Lenovo began its sales promotion for the National Day holiday
from October 1 to 7, announcing it would upgrade its mainstream consumer
products to independent graphic cards, 19-inch LCD monitors and 160-gigabyte
hard disk storage. The holiday is one of the biggest sale seasons of the year in
China.
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