Busy Lenovo Seeks Brand Appeal

PC maker teams with AMD and loads Linux

Lenovo Group is getting down to business.

The PC maker, which purchased IBMs Personal Computer Division in May 2005, has begun rolling out a series of new products, including a ThinkCentre A60 corporate desktop based on Advanced Micro Devices processors.

The new offerings fit into a formula—a mixture of standout products offering more choices to customers, aggressive PC prices and improved relations with resellers—that the company hopes will allow it to win new business and thus grow while fending off competitors and the effects of a slowing worldwide PC market.

"We had a lot of customers who had been asking for some choice in their business desktops. Some of them have AMD processors in their servers," said Thomas Tobul, executive director for global desktop marketing at Lenovo, speaking from Beijing. "Choice is something customers have said theyre interested in."

The ThinkCentre A60—a first in that it targets small, midsize and large businesses in the United States with an AMD processor—was released on Aug. 8. Pricing starts at $379, with an AMD Sempron chip.

Lenovo also aims to become the first large PC maker in several years to offer a notebook with the Linux operating system preinstalled. The company is expected to announce a ThinkPad T60p model with SUSE Linux Enterprise Desktop 10 preinstalled at the LinuxWorld Conference & Expo, which begins on Aug. 14. Lenovo executives also said the company is working with IBM to create a line of low-end servers.

But, despite the strong product showing, resellers say the company faces numerous operational and marketing challenges—not the least of which is brand recognition—as it looks to improve its position as the worlds third-largest PC maker.

Lenovos Think brand, inherited from IBM, continues to be well-known. But several resellers said the company has its work cut out for it in terms of building momentum for its Lenovo brand. Customer reaction to the Lenovo 3000 PC brand, which Lenovo aims to grow with by targeting small and midsize businesses, has been mixed thus far, the resellers said.

Brian Deeley, general manager of Graymar Business Solutions, a health care and public-sector VAR in Timonium, Md., said Lenovos Think products have made a smooth transition to their new ownership.

But while Deeley said he has a good relationship with Lenovo, he said doesnt believe the Lenovo 3000 series will be able to serve as broad a range as Lenovo hopes.

"Once [businesses] get to, say, 10 users, theyre going to have someone playing that [technology] adviser role, and that is not someone who is going to recommend the 3000," Deeley said. However, "The Think [brand] will still compete at the 15-man level."

Other companies have had more success, including one that came up with a quick fix for customers unfamiliar with the Lenovo name.

"We avoided the Whats that? by putting Lenovo/IBM on everything … just until people get used to the new name," said Christine Redmond, president, of Future Vision, a Raleigh, N.C., reseller. Branding issues aside, Future Vision has had relative success with Lenovo 3000 gear, converting roughly 15 customers from Hewlett-Packard, Dell and even IBM ThinkPads to the Lenovo brand.

Lenovo has helped, Redmond said, by offering aggressive prices. After a rebate, a Lenovo 3000 desktop sells for about $750 bundled with a 17-inch flat panel, she said, putting it on par with HP and Dell offerings.

Michael Vizard, Ziff Davis editorial director for the enterprise, contributed to this story.