China's Lenovo to Enter US consumer PC Market
China's Lenovo Group introduced its first consumer computers in the United States on Wednesday, expanding in a region it entered in 2005 with the purchase of IBM's PC business.
The unveiling of three new notebook computers with advanced features is part of a broader expansion by Lenovo into the global consumer PC market. The company also plans to sell the new consumer computers in France, Russia, South Africa, India, Australia, Singapore and Malaysia, among other markets.
It already sells consumer computers in China, India and Singapore, but is hoping the new products will help boost its global market share and brand recognition. In the United States, its sales have been limited to businesses.
Lenovo is introducing the new computers as it faces fierce competition from Taipei-based Acer , which sells personal computers to consumers through Best Buy and other major U.S. retailers, as well as in Asia and Europe. Acer bought U.S.-based Gateway in October, part of an effort to edge out Lenovo as the world's third-largest PC maker.
Among the Lenovo computers' features is software that recognizes users' faces, allowing them to log in to their PC and various applications without passwords. The machines also have multimedia technology that lets users listen to music, play videos and view pictures. They come in a variety of colors including red, blue and black.
Lenovo, which had third-quarter revenue of $4.43 billion, plans to start selling one of the new computers in the United States this week for $799 and a second toward the end of January for $1,199. The third model, whose price Lenovo has not yet released, goes on sale in April.
Notebook computers are typically more expensive than similarly configured desktops and carry greater profit margins. They are also the fastest-growing segment of the consumer PC market, with an estimated 21 percent increase in U.S. unit sales in 2007, compared with a 3 percent projected decline in desktop sales, according to market researcher IDC.
Lenovo spokesman James Baussmann said the company is not disclosing sales projections or profit margins for the new products or how much market share it hopes to grab with them.
Lenovo, China's largest PC maker, is among several companies introducing consumer laptops for the U.S. market at the Consumer Electronics Show (CES) in Las Vegas, the industry's largest U.S. trade show, which starts next week.
Acer and Asustek Computer also have new products lined up for the U.S. market that they will unveil at the event. The three Asian companies are trying to develop globally recognized brands and compete with Hewlett-Packard , Dell and Apple , the dominant U.S. PC makers.
Asustek, based in Taipei, has less than 1 percent of the U.S. PC market, according to market researcher Gartner.
Lenovo has been growing in the United States through sales of PCs to business clients, many of whom had earlier bought computers from International Business Machines . Lenovo bought IBM's PC business for $1.25 billion in 2005.
The company said it plans a marketing campaign focusing on how its consumer PCs help people capture and transform their ideas, but declined to say how much the campaign would cost.
Lenovo's U.S. notebooks will carry its IdeaPad brand, derived from Lenovo's ThinkPad-branded business laptops that it obtained through the IBM deal.
"To date, we have not made a major entry outside the consumer space outside China," Craig Merrigan, Lenovo's vice president of global consumer marketing, said in an interview. "This represents a significant move for us into a major space."
Asus Computer International, the Taiwanese company's U.S. business, is launching a cell phone with satellite navigation technology at CES. It will also unveil a consumer laptop with 1 terabyte, or 1,000 gigabytes, of data storage, the first-ever such device, according to the company.
The notebook and other laptops are part of Asustek's attempt to grab a larger share of the consumer notebook PC market in the United States, where it now has a share of less than 1 percent.
Hewlett-Packard, the world's largest PC maker, also plans to introduce new consumer machines at CES.
They include a light-weight notebook with a rotating screen for entertainment, a high-powered desktop computer that also functions as a television and gaming device and an entertainment hub that lets users download movies, videos, and songs and stream them to TVs and other devices.
The Palo Alto, California-based company also plans to introduce two liquid-crystal display TVs, a 42-inch model and a 47-inch version.