Lenovo goes to rural China with $199 computers
Lenovo Group Ltd. said that it would sell a basic personal computer aimed at China’s vast but poor rural market and priced as low as US$199. Lenovo’s announcement follows rival Dell Inc.’s bid to boost its presence in China’s booming market with the unveiling in March of a low-cost personal computer meant for novice Chinese users.
Beijing-based Lenovo Group, which acquired IBM Corp.’s PC division in 2005, is expanding abroad but is eager to maintain its dominance in China, where research firm Gartner Inc. says PC sales grew by 23 percent last quarter.
Company spokesman Jay Chen said that their focus was to get down to the rural market. He said that the new Lenovo unit would include a processor and a keyboard and would use a buyer’s television set as a monitor. He also said that he had no details on the processor size or other features.
The new Personal Computer goes on sale later this year at prices of 1,499 to 2,999 yuan (US$199-US$399; €150-€300), Chen said. Lenovo Group is the world’s third-largest PC manufacturer, behind U.S.-based Hewlett Packard Inc. and No.2 Dell. Dell, based in Round Rock, Texas, announced in March that it will sell a basic desktop PC designed for China and priced at US$223-US$515 (€163-€376).
Chen denied that Lenovo Group was responding to Dell’s initiative. He said Lenovo has been selling a low-cost PC loaded with educational and other software meant for rural Chinese families since 2004.
Chen said that it was a natural evolution and they were not responding to their competitors. He also said that after three years of market development in low-tier markets they had gained experience and understanding.
Some 800 million people live in China’s countryside, where incomes average about 4,200 yuan (US$560; €420) a year but are rising at an annual rate of more than 10 percent.
Lenovo said it will set up a rural sales network of 5,000 dealers to reach farmers and other customers. Lenovo reported a 12-fold jump in profits in the quarter ending June 30, with earnings of US$66.8 million (€48.8 million) on revenues of US$3.9 billion (euro2.9 billion).
