PC Maker Lenovo Goes for the Gold
Lenovo will compete in next year's Winter Olympic games in Turin, Italy, but the prize is more than a shiny medal.
Lenovo plans to use the event as a launching pad for a global marketing campaign designed to spread the word of its purchase earlier this year of IBM's (IBM) computer unit.
"We believe there is no better stage to launch a brand globally than the Olympic games," said Philippe Davy, vice president of Olympic marketing for Lenovo. "[Turin] will be the coming-out party for Lenovo globally."
While the IBM deal vaulted Lenovo from the ninth-largest PC manufacturer in the world to the third, with just under 10% market share it ranks only fifth in the U.S.Lenovo's hope is to grow twice as fast as the overall computer market, indicating that it plans on taking significant share from much larger players like Dell (DELL) and Hewlett-Packard (HPQ). The push comes at a vulnerable point for the PC industry. Intense competition has eroded already thin margins for desktop computers, and it's starting to do the same for higher-margin notebook computers. Further, component prices haven't dropped as much as usual recently because of supply constraints, further squeezing the bottom lines of PC makers. Lenovo has had its own role in these forces, but company executives indicated that its real efforts in having an impact throughout the world are just beginning. From now until the start of the Olympics -- and even beyond, since Lenovo is also a prime sponsor of the 2008 Summer Olympics in Beijing -- the company will focus on building awareness of its name, reinforcing the idea that it is focused on innovation, and maintaining the IBM ThinkPad line of notebooks as a top priority. Indeed, during a conference call on Tuesday, Lenovo executives stressed that the transition incorporating IBM's products -- and people -- has gone smoother than expected. "Our retention rate is higher than when we were part of IBM," said Deepak Advani, chief marketing officer for Lenovo and the former vice president of marketing for IBM's PC unit.
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