Post-IBM, Lenovo sets sights on expansion

After completing a US$1.75-billion purchase of IBM Corp.’s personal computing business in May, hardware vendor Lenovo Group Ltd. last month unveiled its latest ThinkPad notebooks and also outlined its strategy to boost sales outside of its core China market by targeting the North American small to medium-sized enterprise (SMEs) space.

Purchase, N.Y.-based Lenovo in September unveiled its new Z Series Widescreen ThinkPad notebooks. The laptops, aimed at SMBs, feature 14-inch or 15-inch screens and integrated broadband wireless. Back in June, the firm launched its ThinkPad X41 tablet notebook targeted to IT and mobile professionals.

The firm also rolled out a new notebook protection technology for Lenovo’s ThinkPad notebooks, an internal magnesium alloy casing “roll cage” that covers the sensitive inner workings of the device should it be dropped. According to Lenovo, the casing is designed to protect laptop components from any potential damage from a fall. The company hasn’t yet released specifics around pricing or shipping date for the notebooks.

In a media briefing in New York, Lenovo chairman Yuanqing Yang detailed the firm’s approach, which involves a “transactional” or a “relationship” business model rather than categorizing customers based on direct or indirect sales. According to Yang, transaction customers are only concerned with purchasing the latest hardware on an infrequent basis, while relationship customers seek to establish a connection to the vendor and purchase hardware regularly that’s tailored to their specific requirements.

In Canada, the transition from IBM’s PC division to a wholly owned subsidiary of Lenovo Group has been a relatively smooth one, said Heather Ross, former head of IBM Canada Ltd.’s and current president of Markham, Ont.-based Lenovo Canada. Ross said that Lenovo will continue to have a strong presence in Canada and particularly in the mid-market. “From a marketplace perspective the response has been positive,” Ross said.

“Customers have asked about their relationship (post-IBM)…we will continue to invest in the ThinkPad line,” Ross said. Since the announcement was made last May, the move has been made with minimal disruption for staff and end users, Ross said, adding that the firm will maintain its IBM network of business partners and its connection to IBM Global Services.

Outside of China, the company has traditionally had very few sales. Moving forward, Lenovo said it intends to focus on design and innovation, including coming to market with features like roll cage, in order to compete with rival PC makers Dell Inc. and Hewlett-Packard Co.

According to Toronto-based research firm IDC Canada Ltd., in its first quarter of operation as a distinct entity from IBM, Lenovo closed the second quarter with 12 per cent share in the Canadian PC market. The firm was also was third in desktops and fourth in notebooks with its existing IBM Personal Computing Division ThinkCentre and ThinkPad product portfolio targeted at the commercial market, IDC said.

Under an agreement with IBM, Lenovo has to keep the IBM logo on its ThinkPad notebooks and ThinkCenter PCs for a five-year period. According to Deepak Advani, senior vice-president and chief marketing officer at Lenovo, after 18 months Lenovo is permitted to shrink the size of the IBM logo on the ThinkPad products and increase the size of the Lenovo logo, Advani said. The IBM ThinkPad brand, he added, “will give way to the ThinkPad brand.”

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