Lenovo Goes East, er, West

Posted on April 20, 2008
Filed Under China Business |

The South China Morning Post reports:

Lenovo Group (SEHK: 0992, announcements, news) , the world’s fourth-largest computer maker, was considering acquisitions to expand outside Asia into markets including the Middle East and Turkey, an executive said on Tuesday.

Lenovo, which bought IBM’s loss-making PC arm in 2005, wanted to expand into countries where computer use was less widespread as a slowdown in the US economy threatened to curb spending on technology products.

“We can make big acquisitions, we can do it by cash, selling shares or notes,” senior vice-president and chief financial officer Wong Wai-ming told reporters on the sidelines of a conference in Dubai, the commercial hub of the Arab world.

China is not the only place in the world with a growing PC market. From Arabian Business, a gushing quote from Lenovo’s new Middle East boss Khaled Kamel:

Kamel said: “This is a very exciting time to be joining Lenovo, and to be moving into the PC industry. IDC predictions state that growth of the Gulf PC market will continue to accelerate at an average rate of over 16% between now and 2011. Lenovo has, and will continue, to drive this growth through ongoing expansion of the channel, aggressive marketing campaigns, and of course, unique PC technology across the various market segments.”

Lenovo ranked as the number four PC vendors worldwide by shipments in 2007, although the company is outside of the top 5 in the EMEA region, according to figures from IDC.

Andrew Seymour at ITP has an interesting take on Mr. Kamel’s challenge:

How Kamel plans to strengthen Lenovo’s position will make compelling viewing over the coming months. For me, the tactics for partner growth and the extent to which he drives Lenovo’s engagements with the Middle East channel is central to how successfully the company achieves its targets in the region.

For a start, Lenovo currently utilises a network of just 35 regular partners around the region, which strikes me as being incredibly modest given the potential PC and server growth that is waiting to be captured out there.

Channel expansion has got to feature highly on his gameplan one way or another, especially in the wake of ambitious plans to enter the consumer market in countries such as the UAE. It won’t be easy finding the right distribution and retail partners to champion its cause in what I believe is already an overcrowded market, but it’s also important that the work it undertakes to develop a consumer channel doesn’t overshadow any surgery that needs carrying out on its corporate channel line-up.

Channel and distribution are what give Lenovo its market-leading position in China. Building a similar organization in EMEA won’t be easy. Mr. Seymour notes that Lenovo’s regional marketing chief and its regional channel manager recently left the company.

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