Lenovo makes global desktop move, as low-cost PCs show market promise

By Suzanne Deffree, Managing Editor, News -- 6/30/2008

Lenovo today spread its consumer desktop wings on a global scale, announcing its first desktop to be released outside of China.

With the release of the IdeaCentre K210 desktop, Beijing-based Lenovo marked its global entry into the consumer desktop market beyond its homeland, following through on plans laid out in January when the company first jumped into the worldwide consumer notebook business with its IdeaPad series of notebooks. 

Lenovo, which purchased IBM’s PC business in 2005 for $1.75 billion, launched a consumer division in March 2007 to better capitalize on the market.

The company’s IdeaCentre and IdeaPad introductions are timely, as IDC forecasts worldwide consumer PC demand to grow by nearly 10% a year between 2007 and 20111.

Meanwhile, recent research from iSuppli pointed to the low-price PC segment as a market motivator with the harsh economic climate continuing here in the United States. Lenovo’s IdeaPad was released at a $799 starting price. The IdeaCentre K210 comes at a starting price of $379 after mail-in-rebate. Accompanying monitor prices range from $229 for a 19-inch model to $299 for a 22-inch model, both after rebate.

“iSuppli continues to see a higher value proposition in notebook PCs relative to desktops, and the growth in this segment bears witness to this,” Matthew Wilkins, principal analyst for compute platforms research at iSuppli, said in a statement Friday. “We now forecast global PC unit shipment growth in the range of 10 to 11% this year. Exciting new developments in the area of low-cost PCs will help stimulate PC demand, along with bringing them to a wider audience.”

According to iSuppli, Lenovo ranked fourth among the top PC OEMs with 6.9% market share in Q1. Overall Q1 PC unit shipments rose to 69.9 million units in Q1, up 12.1 percent from 62.4 million in the first quarter of 2007, the research company’s data showed.

The Semiconductor Industry Association (SIA) separately noted that there has been a demand shift for consumer electronics -- including PCs -- that has seen the US slip in its PC ordering while growth from other emerging markets, including China, India, and Latin America, has been on the rise. Until recently, the US accounted for approximately 31% of PC unit sales. Today, the US accounts for around 21% of PC unit sales, according to SIA. On the demand from emerging markets, SIA today reported solid growth of worldwide sale of semiconductors in the month of May.

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