Lenovo reaches for US market share with new launch

Lenovo will launch a line of low-cost desktops and laptops for US small businesses.

In an effort to grab a bigger slice of the US small-business market, Lenovo Group will launch a line of low-cost desktops and laptops.

The company will aim its 3000-series computers at the SMB market to compete with established names like Dell and HP.

The move could be lucrative because SMBs account for about two-thirds of business PC sales worldwide, Forrester Research analyst, Simon Yates, said.

But the company faces a challenge in winning customer trust because this is the first product launched under the Lenovo brand since the Chinese company bought the PC division of IBM last year.

Those inherited products - ThinkCentre desktops and ThinkPad notebooks - were priced for high-end customers, and not designed to offer the wide variety of configurations that small business users expect, Yates said.

So this move represents an effort by Lenovo to strike a balance between competing for new business on a price basis and still preserving IBM's reputation as a premium brand.

There will be plenty of competition. Analysts predict strong growth for the SMB market in 2006 and 2007, so even without the Lenovo move, big providers like Dell and HP will have to fend off entries from smaller firms like Acer, Sony and Toshiba.

All those providers must straddle a line between the different demands of the enterprise, SMB and consumer markets.

Compared to large enterprise buying cycles, SMB owners tend to buy in low volume instead of contracted discounts, are more willing to adopt new technologies and are happy to switch vendors to get a better deal. In return, they demand equipment that works easily because they cannot rely on large IT support staffs.

Lenovo already had strong penetration in the Chinese consumer PC market, and saw its new products as a way to reach both US SMB and consumer buyers, senior IDC research analyst, Richard Shim, said.

Reliability will be the most important tool in reaching that goal.

"Consumers want the latest and greatest technologies, while SMBs rely on their computers for competitive reasons, not just entertainment," Shim said. "Consumers might accept some problems because it's for their personal use, but if it's your bread and butter, it had better work right out of the box."

Lenovo designers could deliver that quality in new products by extending existing technologies such as extending battery life and updating virus protection.

Lenovo declined to comment on the launch.

Join the newsletter!

Error: Please check your email address.

More about AcerDellForrester ResearchHPIBM AustraliaIDC AustraliaLenovoSonyToshibaYATES

Show Comments
[]