China's Lenovo Plans PC Push

Chinese computer maker Lenovo Group plans to launch a global unit to promote sales to individuals and small businesses, a company spokesman said Thursday, as the company tries to establish itself as an international competitor.

Executives acknowledged that the company, which bought IBM Corp.'s personal computer unit in 2005, had yet to become a major competitor outside its home Chinese market.

Lenovo, the world's No. 3 PC maker, said in February that North American sales were down 4 percent amid intense competition.

The new sales promotion unit will be headed temporarily by Lenovo Chairman Yang Yuanqing, said spokesman Jay Chen.

It is meant to expand use of Lenovo's sales model serving individual buyers and small businesses, as opposed to big, long-term corporate clients, Chen said.

He said he had no details of when it would begin operation or how it would function.

"It is being prepared but we don't know yet when it will be announced," Chen said.

The sales model has been used successfully in test markets in Germany and India, Chen said.

Lenovo has reported progress in streamlining integrating the IBM PC unit with its other businesses.

It says profits for the quarter ending in December rose 23 percent to $57.7 million on sales of $4 billion, driven by a 17 percent rise in shipments in its home Chinese market.

The company said its share of the global PC market rose marginally to 7.4 percent.

But Lenovo said it was losing money in the Americas amid falling revenues.

Lenovo announced a $100 million restructuring plan in March 2006 that eliminated about 1,000 jobs from a work force of 20,000.

Yang, the chairman, expressed support for Lenovo executives in February, saying in a conference call with analysts, "the board is willing to give our management more quarters to achieve results."

U.S. rival Dell Inc. launched an effort last month to make inroads into Lenovo's home market, unveiling a basic PC aimed at first-time and novice Chinese computer users.


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