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Lenovo will end top-level Olympic role after Beijing

Computer maker Lenovo Group Ltd (聯想), China's only global Olympics sponsor, will end its top-level support after the Beijing Games, the company said.

A brief statement on the company's Web site said it was refining its global marketing effort, but gave no specific reason for the decision to let the relationship expire.

Olympic sponsorship had "helped the company build a global brand," said the statement, dated Tuesday.

"As Lenovo grows, the company's marketing strategy is evolving to pinpoint opportunities that serve strategic needs in targeted geographies," it said.

The Beijing-based company has announced ambitious plans to step up Olympics-related marketing ahead of the Beijing Games in August.

It was the first worldwide sponsor to design the Olympic Torch, which will be carried on the worldwide relay ahead of the Games.

Lenovo also claims to be providing the largest computer hardware commitment to any Olympic Games in history -- about 20,000 machines and peripherals, including desktop and notebook computers to be serviced by a team of 500 technicians.

Sports marketing industry veterans said the decision to end the sponsorship seemed natural given that the Olympic tie-up had been a strategic move at a time when Lenovo was seeking to establish its brand after acquiring IBM Corp's personal computer unit in 2005.

Lenovo, now the world's No. 3 personal computer maker, reported a 12-fold jump in profits in the April-June quarter to US$66.8 million on strong sales in China and the Americas.

"Originally it aligned quite well with the overall strategy. Now that the objective has been achieved, they are looking again at their priorities," said a Beijing-based sports marketing veteran who asked not to be identified.

Global sponsorship is the highest level of Olympic sponsorship and limited to about a dozen companies willing to pay top dollar to associate their brands with the Olympics worldwide.

Lenovo and the International Olympic Committee have refused to disclose how much the company's sponsorship cost, but analysts estimate it paid US$80 million to US$100 million in cash and services for the three-year cycle covering last year's Turin Winter Olympics as well as the Beijing Games.

Olympic global sponsorships remain highly desirable and their price tags continue to climb, partly as a result of the IOC's decision to limit the numbers.

That should appeal to the growing number of Chinese brands, especially large state-owned banks and other companies who have launched spectacular stock market offerings this year.

Although some of those have signed deals with other franchises such as Formula One, the Olympics, with its mass appeal, is still considered the pre-eminent sports marketing opportunity.

"In terms of global brand awareness, there's nothing that comes close to it," said the Beijing sports marketing veteran.
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