March 4, 2005

Lenovo (aka IBM) - it's more than you think

The tech world will be closely watching to see how the Lenovo purchase of IBM PC's business pans out. The powerful brand and hardware of IBM combines with the power of Lenovo (solid company, large market share in China).

(right - Lenovo's Mac like PC's)

Cnet writes The new Lenovo will have a wide range of markets to set its sights on. While IBM PCs, such as the ThinkPad notebook line, are distributed widely around the world, Lenovo PCs are not. Lenovo products can thus be introduced in the United States, Europe and other markets, O'Sullivan said.

The advantage the new Lenovo has, is that they will be a company very much like Dell and Gateway singularly focused on selling PCs and other electronics to business and consumers.

Cnet writes But even assuming Lenovo does everything right, it still has a mountain to climb. Dell, the king of the hill, and HP aren't likely to cede market share willingly. Moreover, they can use the uncertainty created by the Lenovo deal as ammunition in an attempt to woo away IBM's corporate customers, analysts have said. Despite Lenovo's fresh-looking designs and the potential for the new company to offer lower prices thanks to its greater scale, its brand name is untested outside of China.

Lenovo is "basically as good as anybody else, but people don't know that," said Roger Kay, an analyst at IDC. "The challenge is to acquaint people to Lenovo. The other issue on the reverse side is retaining IBM's enterprise customers, who might be concerned that the change in management means something's disintegrating and that IBM's best technology is coming from its other groups."

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