The Chinese Business Forum @ MIT Sloan

Source: Business Times Singapore
Time: 16 November 2006
Title: "Lenovo goes after consumer market; PC maker releases four new consumer models in Asean"
Author: Roland Lim

"Lenovo yesterday unveiled its first consumer-targeted PCs for the Asean market, underlining its determination to grab a share of the hugely competitive consumer computing market"

"the new products have so far been launched only in China and India"

"'We were previously focused on growing the 'Think' business, but now we're ready to adress this space" - Koh Kong Meng, Lenovo's director of strategy and operations for the Asean region

"Lenovo would adopt its 'transactional business model' strategy to sell its new consumer models. This involves selling its products via retail channels, and is similar to how it sells its current line of products for small and medium businesses"

Products released:

• Lenovo Q desktop → multimedia entertainment PC
• Lenovo H basic desktop → target mainstream consumer market
• Lenovo Y300 notebook
• Lenovo Y400 notebook

Original Text

LENOVO yesterday unveiled its first consumer-targeted PCs for the Asean market, underlining its determination to grab a share of the hugely competitive consumer computing market.

The new products, comprising two desktop models and the two new notebooks, have so far been launched only in China and India.

Citing figures from research house International Data Corporation (IDC), Lenovo said the consumer segment was expected to account for 46 per cent of the worldwide market for personal computers, which encompass both desktops and notebooks, this year.

'We were previously focused on growing the 'Think' business, but now we're ready to address this (consumer) space,' Koh Kong Meng, Lenovo's director of strategy and operations for the Asean region, said in an interview with BizIT. Mr Koh was referring to its range of Thinkcentre desktops and Thinkpad notebooks which is targeted at enterprises.

Last week, Hong Kong Stock Exchange-listed Lenovo announced that it raked in US$3.7 billion in revenue, making a net profit of US$38 million, in its second fiscal quarter ended Sept 30. Excluding Greater China, its Asia-Pacific operations accounted for US$439 million in revenue, or about 12 per cent of its total revenue for the quarter.

In the interview Mr Koh also revealed that Lenovo would adopt what it dubs its 'transactional business model' strategy to sell its new consumer models. This involves selling its products via retail channels, and is similar to how it sells its current line of products for small and medium businesses (SMBs).

'This is a relatively new channel which we've not gone after too aggressively,' admitted Mr Koh. Thus to beef up this segment of its business, Lenovo has expanded the number of store fronts across the Asia-Pacific, excluding China, from 100 at the start of this year to its current 700, Mr Koh said.

'Our research has shown that 80 per cent of computers are bought in cities, of which 80 per cent of these are bought in IT malls,' he added. Thus Lenovo's marketing efforts will include a focus on IT malls.

Lenovo has also expanded its customer service infrastructure by engaging local partners to help handle support for its new consumer products, which come with a one-year warranty.

Beyond expanding its call centre operations, which are outsourced to a third party and based in Kuala Lumpur, it will also have a parts hub based in Singapore and supporting the region. This will also be managed by a third party.

Its higher-end Lenovo Q desktop offering is designed as a multimedia entertainment PC for the home. Unique to it is a jog dial located on the monitor stand that enables the user to call up and navigate through dedicated multimedia applications. Users can switch between viewing photos, watching movies and listening to music at a touch of the dial.

The PC also features an 'instant-on' function that allows these entertainment applications to be accessed almost immediately, without needing to boot the computer into Microsoft Windows.

The Lenovo H is its basic desktop model targeted at the mainstream consumer market.

It features an anti-bacterial keyboard and, like the Q series, has a 'One Key Recovery' that allows users to recover data in the event of a crash.

The desktop computers will be available from Nov 30. Pricing for the Q series begins at $1,599, while the H series will be priced from $1,099.

Lenovo will also be bundling a Maplestory game starter pack and Microsoft student Encarta Premium 2007 with the PCs, while the Lenovo Q series will also come with a Sonic Gear HS555 headset.

Of the two new notebook models from Lenovo, the Lenovo Y300 notebook is the lighter offering at 2.15 kg and comes with a 13.1-inch widescreen display and built-in webcam.

The webcam is put to good use with a face recognition application that enables the user to just look into the camera to log into his or her Microsoft Windows profile - replacing the need for passwords and finger swipes on biometric readers.

The Lenovo Y400 notebook is the larger sibling and features a 14.1-inch widescreen display and a two-watt subwoofer for better bass reproduction.

Pricing for both notebooks has not been released. They are targeted to be on sale from Dec 15.

LOAD-DATE: November 15, 2006