Lenovo takes brave step back into consumer PC's

PC industry watchers have long figured that Lenovo, which holds number one market share in China for consumer laptops, would make another play at the consumer market in advanced countries like the US and Australia, markets IBM had abandoned well before it sold its PC business to the Chinese manufacturer.

Even the most dedicated long-time IBM veterans say that IBM "really failed" in the consumer business in the nineties before it abandoned it in 1999. Upon acquiring IBM's PC division, says David Nichol, director of Lenovo's small business and consumer line for Australia and New Zealand, Lenovo's first priority was to get its commercial business in order before considering retail.

With its commercial range winning market share and a successful launch of a consumer range in India under its belt, the company says it is now ready to tackle the consumer market on a global basis - a market which makes up some 40 per cent of global laptop sales.

In Australia, the vendor will stagger the launch of its "Idea" consumer range - starting with the K-series IdeaCentre desktop, sold at $900 as is or $1399 with a 22-inch monitor, and a 15-inch IdeaPad laptop worth $1499 next month.

A 17-inch laptop and a smaller form-factor desktop called the Q Series will be then be available in March at prices yet to be disclosed. The Australian office of Lenovo is also still weighing up whether to offer an 11-inch model being launched in the United States, as Nichol is concerned that it may be too niche for the Australian market.

Lenovo says it has Sony, HP and Apple in its sights and wants to position its new consumer PC's as premium products.

"We pitted ourselves against those kinds of products and only went to market once we had products that exceeded them," Nichol said. "We want to be understood as a premium brand, something that competes with HP, and something that will not be misunderstood as a low-end brand. It is very difficult to climb out of that hole if you get positioned as a low-end brand. You get discounted against the opposition."

While not being a price aggressor, he did say the new range of Lenovo consumer PC's will be priced under HP in terms of value-for-configuration. "That is a function of establishing the brand," he said. "Companies with well known brands can generally charge more of a premium. You will see us between the Acer and HP price in terms of configuration."

The PCs will be sold with one year on-site warranties for the desktop models and one year return-to-depot warranties for notebooks, aiming to turn them around within the depot in two days.

Nichol says Lenovo has no plans to sell the PC's direct and will target those mass retailers that will help the vendor position the products as a premium brand.

But for all the talk about being a 'premium' play, on first glance the new products look unlikely to unseat the likes of Sony and Apple, whose products (specs aside) are thinner, sexier and carry a better known, classic look-and-feel brand.

But Nichol says there is no reason why Lenovo can't quickly ramp up market share.

"The PC space still tends to be something of a meritocracy," he said. "If your product or the customer experience of the product is the best, its easily found out. There is a pretty mature set of reviewers that make it known what the best products are. If you have something that is really good, you can get a rapid advocacy happening in the market."

Only time, and the reviewers, will tell.