Sun, Dec 05, 2004 - Page 11 News List

Lenovo eager to gain control of IBM brand

UNKNOWN GIANT China's largest personal computer maker is no longer content to be known as the world's cheapest PC supplier, it also wants to be the biggest

NY TIMES NEWS SERVICE , SHANGHAI

But competing globally on its own, especially against Dell's vaunted manufacturing efficiencies, could be a stretch for Lenovo. A US venture capitalist who recently toured the Lenovo factory in Shanghai said that he had been surprised that it lacked the bustling, just-in-time urgency that he had observed on a similar tour of a Dell assembly line in Round Rock, Texas.

At the Lenovo site, pallets of computers were stacked high to the ceiling, according to the investor, who insisted on not being identified, and the production line was moving slowly compared with Dell's.

Moreover, with China's economy growing rapidly, increasingly affluent and brand-conscious people are turning to Dell, IBM and Hewlett-Packard computers. Executives at Lenovo are intent on competing with those better-known brands, saying Lenovo is not interested in simply being known as the lower-cost supplier. IBM's product line would automatically push Lenovo up the cachet curve.

Most crucial to Lenovo's worldwide aspirations, analysts say, would be IBM's ThinkPad line of portable computers -- which even among US customers has a much more devoted following than many of the other products in IBM's line.

"This is their stepping stone to a global market," said James Mulvenon, a China researcher who is deputy director of the Center for Intelligence Research and Analysis, a Washington research center.

Otherwise, he said, Lenovo faces the same brand-recognition problem that has plagued the Taiwanese computer maker Acer, which ranks fifth globally, but is an also-ran in the US market.

"This is a story about a Chinese company adopting an American brand," Mulvenon said.

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