ThinkPad returns to retail

The ThinkPad is gearing up for its return to retail, starting with a partnership announced Thursday between Lenovo and Office Depot.

Consumers will be able to purchase either a ThinkPad Z60t wide-screen for $1999.99 or a ThinkPad T43 with biometric fingerprint readers for $1499.99 starting Sunday, China's Lenovo Group said. Other ThinkPad products will be available online and for special order in store starting at $699, Office Depot said. The computers are expected to compete with similar designs from Office Depot's other PC suppliers: Hewlett-Packard, Sony and Toshiba.

It's the first time ThinkPad-branded computers have sat on store shelves since IBM backed out of the retail business in 1999 in favor of a direct-sales model. ThinkPad laptops are almost exclusively sold online except for a handful of showrooms, such as RSC Experience on Madison Avenue in New York.

It's also the first major retail initiative by Lenovo since its $1.25 billion purchase of IBM's personal computer assets in the spring, and probably not its last, said Sam Bhavnani, an analyst with research firm Current Analysis.

"This is a nonexclusive deal, which means Lenovo will more than likely announce additional retail partnerships early next year," Bhavnani said. "Retail is messy, but Office Depot is a good start for Lenovo because they would only have three competitors to share shelf space with."

Likely candidates for future Lenovo retail contracts include Staples, Office Max and Costco because of its small business focus, Bhavnani said. BestBuy could also be a contender because of its recent focus on small-business customers.

Lenovo will need to be mindful of pricing, Bhavnani added, because Office Depot does drop its prices drastically. The retailer's latest circular advertises Toshiba and Compaq laptops with Intel Celeron processors for $599. Office Depot also offered a $399 Compaq Presario about a month ago.

Office Depot said it will also retail ThinkPad models belonging to the X Series and R Series, as well as Lenovo's X41 Tablet 12-inch convertible tablet.

A growing consumer market for ThinkPad computers is a concern to Lenovo's competitors, Bhavnani said, noting that HP's retail strategy is focused on consumers and small businesses, while Dell finds itself facing a competitor with a sought-after product.

Though Lenovo is not a household name, ThinkPad is an established brand, and the computer maker is building on that through its partnerships with well-known companies like Office Depot.

Lenovo outlined a broad restructuring late last month, part of its attempt to integrate its own China-focused business with the vast global business of its new IBM assets. Executives said the company would shift from IBM's direct marketing relationship sales to more transactional sales targeted at small to medium-size businesses.

China is now the world's second-biggest PC market, with 15.8 million units shipped last year and expected growth of more than 14 percent this year and in 2006, according to IDC.

Lenovo controls about a third of the market, following the IBM purchase.