Sat, Feb 25, 2006 - Page 10 News List

Lenovo set to debut branded computers

MARKET TEST The Chinese PC firm, number three in the world, will soon introduce its own-brand products in the local market -- but analysts say it will face a tough audience


Lenovo Group Ltd (聯想) plans to make the Taiwan debut of its first desktop and notebook series bearing the "Lenovo" logo next month, a company executive said yesterday at a product launch.

Laurence Hwang (黃維德), general manager of Lenovo Technology BV Taiwan Branch (荷商思惟), made the remark after the world's third largest computer maker announced on Thursday a global introduction of Lenovo-branded computers in 10 cities, including New York and Paris, marking its first forays outside its home base of China.

Hwang declined to disclose the models and prices Lenovo will bring to Taiwan. But he said the company won't join the price war in the local notebook market, which started in the third quarter last year and saw vendors pushing portable computers priced below NT$20,000.

"The price war is disruptive and not sustainable over the long run," added James Arnold, an executive of Lenovo's Taiwan branch, who oversees brand and marketing activities.

Instead, Lenovo's products will come in stylish exterior designs and latest industry specifications to tempt consumers into buying these brand-new products, he added.

To further differentiate from the Think brand -- which includes ThinkPad notebooks and ThinkCenter desktops inherited from IBM Corp's ailing PC unit in May last year -- the Lenovo brand will be geared toward the consumer segment rather than mid- and large-sized enterprises, according to Arnold.

Shares of Lenovo, however, fell yesterday in Hong Kong on concern the company's marketing costs will rise as it promotes its own-brand products. Its stock closed 2.3 percent lower at HK$3.25.

Since local consumers are price sensitive, technologically savvy, and often shun products made by Chinese vendors, Lenovo may have a tough road ahead, said Amy Teng (鄧雅君), an analyst at Gartner Inc's Taiwan office.

It is a prerequisite for Lenovo to attract consumers by offering competitively-priced products such as those from Asustek Computer Inc (華碩電腦) or Acer Inc, the nation's top-two notebook brands, Teng said.

"However, I don't expect Lenovo to slash prices to make the products very low-end in their debut, since this would damage its brand image," she added.

As Lenovo is just testing the waters in the second quarter this year, the real test of its performance and market acceptance will be in the third quarter, which traditionally is the peak selling season, she said.

Lenovo increased its global computer shipments to 13.9 million units last year, up from 4.3 million a year earlier, according to the latest preliminary results from ISuppli Corp.

In the fourth quarter, Lenovo's 4.4 million units accounted for 7 percent of global shipments. The company's shipments grew 242 percent in the fourth quarter from a year earlier, the research firm said.

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