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Lenovo plans new consumer business unit

Posted: 12 Apr 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Lenovo consumer unit? Lenovo consumer business? Lenovo PC maker?

China PC maker Lenovo Group Ltd announced its plan to set up a new consumer business unit, according to a Reuters report.

"(The plan) hasn't been implemented yet, but we have been working towards this goal," said a Lenovo spokesman in the report. "The timing of the announcement (of the new unit) depends on our top management," he said, declining to offer details.

Industry sources said Lenovo will establish the unit to boost sales of its PC and other consumer electronic products in global markets.

Meanwhile, the spokesperson denied a market speculation that Lenovo will be divided into two companies to address the commercial and consumer electronics sectors.

Growing outside Asia
How the PC maker overhauls itself to regain ground outside Asiaespecially with the release of Microsoft Corp.'s Vista OSwill be a focal point this year.

Lenovo's share in Asia (excluding Japan) grew 21.6 percent in Q4, according to IDC. However, its shipments declined in the U.S. and Japan markets and modest volume gains in other regions were not enough to preserve market share, IDC noted.

Industry analysts attributed the slide to unattractive product design, lack of distribution channels and little experience in the international arena, adding that Lenovo also faced difficulty in gaining brand recognition outside Asia.

"Europe and the U.S. are tough markets for Lenovo on the consumer side," said Florian Pihs, assistant VP at Beijing-based research firm Analysys International. "Their plan has been for some time to use the successful consumer strategies from China and apply them in the rest of the world. I would interpret this as a signal that this has not worked well so far."

Lenovo has been struggling with expenses from layoffs and corporate streamlining after its $1.25 billion purchase of IBM's PC arm in 2005. Lenovo chairman Yang Yuanqing told Reuters in September that it will take at least three years for the company to return to strong profitability.

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