Lenovo Looks to Expand into Consumer PCs

 
 
By Scott Ferguson  |  Posted 2008-01-03 Email Print this article Print
 
 
 
 
 
 
 

Lenovo is trying to expand beyond its enterprise business by attacking the global consumer space.

For the first time outside of China, Lenovo is launching a line of consumer desktops and laptops in a move to increase the companys global PC market share and expand its brand recognition beyond enterprise buyers and small businesses. At the International CES, which starts Jan. 7 in Las Vegas, Lenovo will officially launch its IdeaPad line of consumer laptops and the new IdeaCentre desktop model. Lenovo is initially targeting 15 countries with the new PCs, including the United States, as well as emerging markets such as Russia, India and South Africa. While the consumer launch will not directly impact Lenovos enterprise business or its ThinkPad and ThinkCentre PCs, the companys new focus on the consumer market will help it compete on a global scale against the likes of Hewlett-Packard, Dell and Acer, which all have well-established consumer offerings and have been reaping the benefits of a consumer market focused on mobility.
In a recent report, Forrest Research found that 86.9 million U.S. households had bought a PC in 2006. In 2012, that number is expected to increase to 102.7 million households, which makes the consumer market a tempting target for all of the major PC vendors. (Lenovo quoted an IDC study that found the market for consumer PCs will grow 10 percent annually through 2011.)
While Lenovo and its ThinkPad and ThinkCentre PCs already enjoy a significant share of the professional IT market, the move into the consumer space is a vital step forward for the company, said John Spooner, an analyst with Technology Business Research. Click here to read about Lenovos launch of its new ThinkStation PCs. "This move into consumer PCs should allow Lenovo to continue to grow both its revenue and its PC shipments and therefore allow it to continue to invest in the research and development of [its] ThinkPad line, for example, and [its] energy-efficient desktops," Spooner said.
The difficult part now, Spooner added, is fighting for shelf space in retail stores—Dell is also looking to increase its retail presence at the same time—and maintaining profitability in a market where the average prices for both laptops and desktops continue to drop. For the new consumer line, Lenovo is looking to build on the legacy of IBMs PC division, which it bought in 2004. Michael Kuptz, vice president and general manager for Lenovo United States, said the company also developed its consumer offerings by looking first at what services and features worked well in the Chinese market and then using those ideas, as well as input from consumers and retail stores, to develop a whole new line to differentiate its PCs from others in a crowded market. "We see the growth in the consumer space as a critical area for our products," Kuptz said. "It is an area [in which] we believe strongly that our differentiated features and capabilities will set us apart … Plus, it expands the brand for Lenovo beyond the strong brand awareness we have built around ThinkPads and ThinkCentre. In turn, were hoping that a positive user experience with our new consumers will then translate into the business buying and the corporate buying arena." The features of the IdeaPad and IdeaCentre product were also designed to be different from those found in Lenovos 3000 Line, which launched in 2006 and was developed specifically for small and midsize businesses. These new consumer features include capabilities such as a facial recognition feature called VeriFace Face Recognition, which will eliminate the need for passwords and other log-ins. Lenovo is also offering a wide range of multimedia features and a range of colors, different textures and ergonomic designs. Lenovo is also offering features that will allow customers to save on notebook battery life. Click here to read more about the current PC market and which companies are benefiting. After CES, Lenovo will launch three Intel-based notebooks for the U.S. market, including the Y710 with a 17-inch display, the 15.4-inch IdeaPad Y510, and the 11-inch IdeaPad U110. The prices will range from $1,199 for the 17-inch model to $799 for the 15-inch model (pricing for the U110 has not been set as of yet.) Lenovo is relying on Intel Core 2 Duo processors for its initial launch into the consumer market. The company did not announce any plans to offer consumer PCs with Advanced Micro Devices chips. All of the new consumer PCs will come with Microsoft Windows Vista Home edition. In the coming year, Lenovo plans to use its sponsorship of the 2008 Summer Olympics in Beijing to help promote the new line. For Lenovo, the move into consumer space comes after a year in which its global market share was challenged by Acer, which bought Gateway in August, at the same time the company is looking to expand in North America, Europe and the emerging markets. The consumer space is the next logical step for the company. "For big companies to maintain their market share, they have to be in the consumer space," Spooner said. "This is its first major effort at the consumer market and this is a huge announcement for Lenovo." Editors Note: John Spooner is a former senior staff writer for eWEEK. Check out eWEEK.coms for the latest news in desktop and notebook computing.
 
 
 
 
 
 
 
 
 
 
 

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