Raising Its Profile
Roger Kay, president of Endpoint Technologies Associates in Wayland, Mass., said that Lenovo definitely needs to raise its profile if it is to compete with Dell, HP and myriad other PC makers and succeed. "Lenovo needs to become more aggressive in its sales strategy, and they need more time to develop their markets," Kay said.The State Department, responding to fears that its security might be compromised by secretly placed devices or hidden software, agreed under pressure from the legislators to keep 16,000 personal computers made by Lenovo off networks that handle its classified government messages and documents. "That did not help Lenovo in the government sales channels," Kay said. Kay said he wasnt overly surprised to see the negative quarterly report. "More than anything, this shows that integrating a company isnt the easiest thing to do," Kay said. "You talk about merging HP and Compaq a few years ago? Texas and California ... thats not nearly as big a cultural divide as integrating Raleigh [N.C.] and Shanghai." IT industry analyst Charles King, of Pund-IT in Hayward, Calif., said that Lenovos main problem is that it is "attempting to digest a $1.25B Thinkpad Happy Meal. Lenovo does have brand-recognition issues to deal with in the U.S. market, but its position in Asia is solid. It will take time, but I believe the company should eventually do well in the U.S." King said that Lenovo can overcome its current problems if it keeps doing what it knows best. "They didnt stumble into market leadership in Asia. They cant let analyst skittishness deter them from their plan. "They should keep driving into retail locations to improve product visibility. The real challenge is building a retail strategy to support them, but Lenovo needs to do that anyway to better establish its brand in the U.S." Fiering said that to extricate itself from its current red ink, Lenovo needs to hold on to its existing business in China, developer a more aggressive sales program ("they need to learn to get out there and knock on doors"), and develop new products. "Ive seen the factory over in Shanghai," Fiering said, "and its amazing what they can build there. But so far, their products have been underwhelming, to say the least. "They are very good at pricing, but the features arent there to distinguish it as being markedly better than the competition." King said he believes that the future still looks bright. "In Thinkpad, Lenovo purchased one of the best quality laptop product lines in the market, but its up to Lenovo to get that story out to a larger market," he said. Check out eWEEK.coms for the latest news in desktop and notebook computing.
Kay said that Lenovo lost some credibilitydeserved or undeservedwithin the U.S. government sector May 23 when a group of Congress members publicly denigrated Lenovos laptop computers as possibly being "spy machines" simply because they were manufactured in China.