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September 22, 2005 9:59 pm

Lenovo plans assault with $400 desktop

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Lenovo, the world’s third-largest PC producer, is poised to launch a new series of cheaper and more colourful Thinkcentre CORR desktop computers intended to extend the brand to small business buyers neglected by former owner IBM.

Prices for models in the new E-series desktops are expected to start at less than US$400 without a monitor, about US$100 less than the current cheapest Thinkcentres, according to a PC industry manager familiar with Lenovo’s plans.

“It’s a very low price point,” the manager said.

The move to extend the Thinkcentre brand, acquired in May from IBM along
with the US company’s global PC business, is part of Lenovo’s drive to expand its customer base beyond its mainstream buyers in large corporations and government institutions.

Widening the appeal of the Think range of products is essential if Lenovo is to make a success of its bold US$1.75bn acquisition of the loss-making IBM PC unit, a deal that transformed it into China’s first multinational IT company.

Lenovo this week moved to win new buyers for the former IBM unit’s Thinkpad range of laptops with a new series of models with wider screens and built-in wireless data access.

The new laptops are also being offered with covers made of “brushed titanium", a break with IBM’s tradition of selling them only in its trademark black.

The E-series of Thinkcentre PCs, to be launched in the next two to three weeks, will also offer “a bit more colour”, the PC industry manager said.

Lenovo plans to use the Think brands bought from IBM for its premium products, in order to differentiate them from PCs and laptops aimed at the retail market.

Selling more Think PCs and laptops to small business buyers will require Lenovo to step up distribution efforts outside China and also carries some risk of weakening the brand’s premium image.

However, senior managers believe that offering lower- cost computers does not require the company to accept lower margins.

Lenovo says its profits on cheap computers sold to small cities in China can be higher than high-end goods marketed in the rich cities of the east, in part because they use more economical parts such as processors from US chipmaker AMD instead of those from market leader Intel.

The new cheaper Thinkcentre desktops will still offer security and back-up “Thinkvantage” technologies long used by the former IBM unit to differentiate its products from other PC manufacturers.

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