Lenovo makes splash
Lenovo is having its 'coming out' party in the U.S. with the release of its first Lenovo-branded PCs.
By Amanda Cantrell, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - Until now, the only Lenovo computers U.S. consumers could buy still had an IBM logo stamped on the machines.

But Thursday, the Beijing, China-based company, which acquired IBM's personal computer arm last year, unveiled its first Lenovo-branded computers into the U.S. market in a move to take market share from the PC market's established heavyweights.

The Lenovo 3000 desktops, currently shipping with a choice of Intel (unchanged at $19.16, Research) or AMD (up $1.32 to $35.67, Research) processors, depending on the model, start at $349. The Lenovo 3000 C100 desktops, which will debut in early March, start at $599 and will feature only Intel processors. Both the laptops and the desktops are targeted at small business users, a move Lenovo has not previously targeted in the U.S. The company will release two subsequent laptop offerings in late March and some time in the second quarter, respectively.

In China, Lenovo boasts a 26 percent share of the small business market, but that figure slips to 6 percent globally. In targeting U.S. small businesses, Lenovo faces stiff competition from market leaders Dell (up $0.07 to $29.73, Research) and HP (down $0.16 to $32.38, Research), and increasingly from smaller players like Acer.

But the company is focusing heavily on service and support as a differentiating factor, down to its slogan -- "Worry-free computing" -- which it will feature in print ads for the new machines. The new machines also come with a support plan backed by IBM's service and support division in the U.S. as well as "Lenovo Care" tools, which users can access on their desktops and which allow them to perform tasks such as data backup and recovery.

Lenovo's U.S. arm, headquartered in Raleigh, North Carolina, has heretofore only released ThinkPad computers, the successful IBM brand that Lenovo opted to continue selling as is, down to the IBM logo on every machine. The ThinkPad line contains features that are meant to appeal to large corporate customers, and some of these features are not included on the Lenovo 3000 line because of its small-business focus.

Lenovo has ramped up efforts to raise awareness of its brand in the U.S. in recent months, including a sponsorship deal tied to the 2006 Winter Olympics that includes a print and TV ad campaign.

"This is Lenovo's coming out party," said Sam Bhavnani, principal analyst in the mobile electronics and computing practice at research firm Current Analysis. "You've seen them start to have more of an advertising splash with the Olympics, and more web advertising. But the products they launched earlier in the year were IBM legacy products."

Though Lenovo is still not directly targeting consumers, it's broadening its focus to include small businesses, a move away from IBM's strategy of focusing mainly on large, corporate customers. But it has priced the new machines at a level that could be attractive to consumers.

It's also getting into the retail space, which IBM (Research) abandoned six years ago. It announced in November a deal with retailer Office Depot to sell ThinkPad machines. Lenovo executives said the company, which has a heavy retail presence elsewhere in the world, is talking to other U.S. retailers but is not prepared to announce any new deals.

Last year, the company hired Bill Amelio away from Dell (Research) as its new CEO. Amelio, who is viewed as being largely responsible for Dell's success in Asia, could have the potential to turn Lenovo/IBM into a Dell-like company with leaner margins and better execution.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.