MIT Sloan Courseware

The PC Wars: Dell vs. Lenovo1

Luis Vives de Prada & Donald Lessard

The April 2005 acquisition of the IBM PC division by Lenovo, creating overnight a Chinese and US-based global player, significantly raised the stakes for Dell, the largest PC maker, in what was already a highstakes game. "If I were Dell, I'd be worried," said Laura DiDio, an analyst for Boston-based research firm Yankee Group. "I'd expect (Lenovo) will be very aggressive and take Dell head on. I'm anticipating they are going to be a tough competitor. This is a full-court press."2 Although Dells initial public response was dismissive, "Really, they (Lenovo) are still very China-centric," declared Kevin Rollins, Dell CEO. "If you look at where theyd grown, where their profitability resides, it's still a Chinese business." Their growth is actually deteriorating. The question is, can they continue to compete globally, versus continuing to compete in China"3 the difficult times for Dell had already started. A slowdown in sales in 2005 caused the company to miss its announced projections (see exhibit 1 Decrease in Sales in the US), and its stock was heavily punished by investors (see exhibit 2 Evolution of Dell Stock Price). "No, the sky is not falling at Dell," Mr. Rollins said. "We failed to meet our own expectations, which were high. But you'd think we were not growing or were losing money by what you read. We still have an outrageous track record. Our model still works very well."4 Nevertheless, Mr. Rollins admitted that some changes were necessary for Dell, but "we are not talking about wholesale upheaval. We are tweaking, making refinements and enhancements, and resetting."5 Yet, it was
1 PC Wars: Dell vs. Lenovo case was written by Postdoctoral Fellow Luis Vives de Prada and Professor Donald R. Lessard, at the MIT Sloan School of Management in April 2006. 2 Lenovo's coming out party, by Amanda Cantrell, CNNMoney.com published on January 5, 2006. http://money.cnn.com/2006/01/04/technology/lenovo/index.htm, accessed on February 3, 2006 3 Dell CEO Takes Digs At Lenovo, by Edward F. Moltzen, CRN, published on Mar. 01, 2006, http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=181401700, accessed on March 01, 2006 4 Dell's missing mojo, by Amanda Cantrell, CNN/Money published on November 9, 2005. http://money.cnn.com/2005/11/09/technology/dell_analysis/index.htm, accessed on February 3, 2006

clear that investors were concerned about Dells future and wanted the company to go back to double digit growth, an expectation that had been set by the company in the past. "A 6 to 9 per cent growth rate is not something we aspire to."6 "Our belief is that we would want to grow faster than that"7. However, current market conditions seemed to be overwhelmingly working against Dell. Most of the growth in recent times in the PC industry was outside the US and in the consumer market, two segments in which Dell was relatively underrepresented8 (see exhibits 3 and 4). Moreover, the reduction in the average selling price (ASP) due to increasing competition in the industry was also expected to negatively affect the bottom line of the company. "We remain concerned that continued declines in PC pricing will continue to make PC revenue growth harder for Dell"9 stated a recent Bear Sterns investment report. Dells goal of 9%-10% operating margins is not an immediate priority or an integral element of company strategy10. The US computer company also faced tougher competition in the enterprise hardware and services segments, and Dells cornerstone competitive advantage, its asset velocity model, had been having little impact on its competitiveness due to the firm component prices11. Nevertheless, the company was convinced that their business model was the right one to continue to be successful in the future. "Our model continues to be the best in the business," Michael Dell defends. "We wouldn't trade ours for anyone else's! It's also important to have a little perspective. In the past ten years our sales are up about 15 times, earnings and the stock price are up about 20 times. Not too shabby!12 While all this was happening, Lenovo, one of the new Chinese dragons, was looking at the United States as one of the key markets for its future expansion. Since the company closed the deal to acquire IBM Personal Computers business on April 30, 2005, they had kept a fairly low profile in the United States. But this was about to change, as the company stated in its 3 phase plan, released with its 2004/2005 year results in which they stated that one of its main objectives was to grow Lenovo into a worldwide brand13 (see exhibit 5 Lenovos 3 phase plan), so the United States, the most important country in the computer business in the world couldnt be forgotten. "2006 is the coming out party for Lenovo," said Peter Hortensius, senior vice president of Lenovo's notebook business unit. "2005 was a year of integrating the business and laying the groundwork" for

5 Dell's missing mojo, by Amanda Cantrell, CNN/Money (November 9, 2005, accessed on February 3, 2005). Source: http://money.cnn.com/2005/11/09/technology/dell_analysis/index.htm 6 Dell revenue growth picking up, Business Section The Advertiser, http://www.theadvertiser.news.com.au/common/story_page/0,5936,18322058%255E462,00.html, accessed on March 01, 2006 7 Dell revenue growth picking up, Business Section The Advertiser, http://www.theadvertiser.news.com.au/common/story_page/0,5936,18322058%255E462,00.html, accessed on March 01, 2006 8 Source: Dell Credit Suisse Report. February 2006. 9 Dell's missing mojo, by Amanda Cantrell, CNN/Money (November 9, 2005, accessed on February 3, 2006). Source: http://money.cnn.com/2005/11/09/technology/dell_analysis/index.htm 10 Dell Inc. Bear Stearns Report, January 05, 2006. 11 Source: Dell Credit Suisse Report, February 2006. 12 Dell's Midlife Crisis, by Andy Serwer, Fortune Magazine (November 28, 2005, accessed on February 3, 2006). Source: http://money.cnn.com/magazines/fortune/fortune_archive/2005/11/28/8361935/index.htm 13 Source: Lenovos presentation 2004/2005 company results.

what is to come in 2006, he said which will include Lenovo-brand desktops and notebooks that don't carry the ThinkPad logo.14 To support the expansion of the companys foothold, Lenovo strengthened its senior management team by selective hiring (see exhibit 6 for Lenovos Worldwide Management Team). Among others, the Chinese computer company hired William (Bill) Amelio, former senior vice president at Asia-Pacific and Japan for Dell, at the end of 2005, as new CEO replacing Steven Ward. William Amelio was viewed as the responsible for the successful entry of Dell in Asia. Now, Mr. Amelio could help Lenovo to improve its execution and margins, turning into a Dell-like company. "Bill Amelio's combined experience - in our industry, in emerging and mature markets, in senior operational roles and with IBM - gives him the perfect profile to lead Lenovo from the important stability we have achieved in the first phase of our integration, to the profitable growth and efficiency improvement to which we are committed in our next phase," said Lenovo's Chairman Yang Yuanqing15. The PC Industry The PC Industry can be traced back to the 1970s. In those years, various companies launched what were known as microcomputers the MITS Altair, the Imsai 8080 or the M6800 computer are some examples. If you wanted a personal computer back in 1975, you had to build it yourself. For under $500 ($1,700 in todays money) you could mail-order a bag of parts that, after a few days frustrating construction, became the Altair 8800. Named after a star in a Star Trek episode, the Altair was a large blue box with no keyboard or screen. To program it, you flipped switches on the front and then read off the results on two rows of tiny red lights16. However, one can state that the Apple II was the first truly personal computer. The Apple II was launched by Apple in 1977. The company chose its name because Steve Jobs, one of the founders of the company, had recently worked at an organic apple orchard. "[H]e thought of the apple as the perfect fruit--it has a high nutritional content, it comes in a nice package, it doesn't damage easily--and he wanted Apple to be the perfect company. Besides, they couldn't come up with a better name."17 The Apple II soon became a huge success, selling more than 4,000 units in 197718. Among its features it included a color display, eight internal expansion slots, and a case with a keyboard. Other of the reasons that can explain the early success of the Apple II was the availability of different applications such as VisiCalc, the first spreadsheet program available for personal computers that transformed the Apple II into a serious business machine19. In the late 70s, IBM, after carefully observing the development of the personal computer industry finally decided to launch its own project, even if rumors at that time said that they were considering the acquisition of the fledging game company Atari to enter in the industry. On August 12, 1981, IBM launched the first IBM PC, a machine that run on ran on a 4.77 MHz Intel 8088 microprocessor with 16 kilobytes of memory,
Lenovo's coming out party, By Amanda Cantrell, CNNMoney.com writer January 5, 2006, http://money.cnn.com/2006/01/04/technology/lenovo/, accessed on March 2, 2006. 15 Lenovo replaces Big Blue CEO with Dell man, By Ashlee Vance in Mountain, published on 21 Dec 2005. http://www.channelregister.co.uk/2005/12/21/lenovo_hires_dell/, accessed on March 7, 2006. 16 Source: People Magazine 2004, Bill Gates Interview. 17 Source: Apple II History. http://apple2history.org/history/ah02.html, accessed on March 5, 2006. 18 The sales of Apple II systems up to date are above the 750,000 units. Source: http://oldcomputers.net/appleii.html, accessed on March 5, 2006. 19 Source: Oldcomputers.net. http://oldcomputers.net/appleii.html, accessed on March 5, 2006.
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expandable to 256k. Although the IBM PC benefited from IBMs existing sales and distribution channels, the company also granted permission to outside distributors such as Sears & Roebucks and Computerland to sell their new product20. The original IBM PC failed to conquer the domestic market, but it soon became a success among business clients. In next to no time, the company launched to the market the IBM Personal Computer XT, an enhanced version targeting the business segment, and developed the spreadsheet program Lotus 1-2-3. IBM launched the PC with an open architecture, what opened the door to other manufacturers to produce and sell compatible machines. Benefiting from the open architecture, other companies soon decided to enter the market. Among others, it is relevant to highlight the launch of Compaq in 1982. Founded by three former executives of Texas Instruments, Compaq first product was a portable personal computer able to run all of the software being developed then for the IBM PC21. Compaq established a crew of retail dealers and value-added resellers to distribute its products. To give them strong incentives to increase their sales, Compaq promised them a complete control of the market, including corporate clients, differently from IBM, who directly controlled its corporate clients. One year later, in 1984, Michael Dell, a freshman at the University of Texas at Austin, started on a part-time basis to sell random access memory (RAM) and disk drives for IBM PC and compatible machines. By April 1984 his monthly sales were of about $80,000, so he decided to drop out of college to focus on his business. "Being an entrepreneur wasn't on my mind", said Michael Dell in an interview. "What was on my mind was the opportunity I saw ahead, which was so compelling."22 In a little while, he started to assemble IBM clones under the brand name PCs Limited. Instead of establishing a retail force similar to the one used by IBM or to follow Compaqs model, Michael Dell decided to sell his machines directly to the customers. In this way, he was able to eliminate the retail mark-up, selling his computers at 40% lower prices compared to those ones offered by IBM, still getting a profit. (When I started) my plan was to sell built-to-order computer systems directly to end users. I recognized there was a big opportunity there because of the inefficiencies of the indirect system23 Just to have an idea of how far Dell has come, when the company was founded IBM and HP were voted No. 1 and No. 3 on America's Most Admired Companies respectively. Commodore, with about $1.1 billion in PC sales, was the industry leader with a 27% U.S. market share, qne IBM was No. 2, with Apple and Tandy coming next. "You have to just say he has done a hell of a job," says former GE CEO Jack Welch. "No one has pulled the levers of cost, quality, and service better than Dell."24 Far away from the United States, but the same year in which Michael Dell founded PCs Limited,1984, Liu Chuanzhi with a group of Chinese scientists, and the support of the Chinese Academy of Sciences founded New Technology Developer Inc. (predecessor of Lenovo). The new company had an initial capital outlay of only RMB 200,000, (US$25,000), to distribute computers for IBM and other PC makers in China. The first product that the company developed was a card that could be inserted into the extension slot of a personal computer to provide Chinese-language functions.
Source: Inventors at About.com. http://inventors.about.com/library/weekly/aa031599.htm, accessed on March 5, 2006. Source: Compaq History. http://h18020.www1.hp.com/corporate/history.html, accessed on March 5, 2006. 22 Source: The Idol Life: Michael Dell. http://www.entrepreneur.com/article/0,4621,295495-2,00.html, accessed on March 5, 2006. 23 Source: The Idol Life: Michael Dell. http://www.entrepreneur.com/article/0,4621,295495-2,00.html, accessed on March 5, 2006. 24 The Education of Michael Dell, by Andy Serwer in Fortune Magazine March 7, 2005
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In 1988, the company established Hong Kong Legend and in 1989, the Legend Computer Group Co. followed in mainland China. The company aimed at becoming more than just a distributor for other brands and in 1990, the first Legend PC was launched to the market, pioneering the PC industry in China. To support growth the company needed to access capital, so it offered its first stock publicly in February 1994, and by 1996, Legend was already the market leader in China, launching its first own-brand laptop. The PC Industry Today At the end of 2005, the worldwide PC installed base was composed by 798.4 Million units, one computer per every eight people worldwide (see exhibit 7 Global PC Installed Base in 2005). However, the distribution of this established base was very heterogeneous. North America and Western Europe accounted for more than 50% of the total installed base, while very large countries and regions such as India, China or Latin America accounted for only 2%, 8% and 7% respectively. Nevertheless, these areas are experiencing nowadays the highest year to year growth, reducing the gap that separates them from North America and Europe (see exhibit 8). The top 5 vendors Dell, HP, Lenovo, Acer and Fujitsu / Fujitsu-Siemens controlled in 2005 slightly more than 50% of the annual worldwide PC shipments (see exhibits 9 and 10 Worldwide PC Shipments, 2005). The largest share of the market was controlled by two US companies, Dell and HP. Dell was the leader with a market share of 18.1%, followed by HP with a 15.6% of the market (company that was the result of the merger between the former HP and Compaq in 2002). The third place of the market was for Lenovo with 7.2% (after its acquisition of the IBM PC Division). Finally, two other Asian companies closed the top 5 list, Acer and Fujitsu, with 4.7% and 4.1% market share respectively. About Dell The Dell Business Model Dells success story is based on a combination of factors: its direct-to-consumer sales, the just-in-time manufacturing, small expenditures in research and development and its reliance on the WINTEL (Windows + Intel) architecture. The direct-to-consumer sales, in addition to reducing sales and distribution costs, allowed buyers to customize the product to suit their needs. Dell maintains a direct relationship with its clients, avoiding any intermediaries. The company first established a telephone line to allow customers to order their computers and in 1996, with the development of the commercial internet, Dell started to offer its products through the Internet. At that time there were skeptics that werent sure people would be willing to buy their computers online. However, Dell proved them wrong, and the online model soon took off in the US. A significant number of the clients that ordered a Dell online have had previous experiences of online shopping, making them less reticent to acquire a computer in this way. "Enough consumers have been shopping online for three or more years that they trust the Internet to buy almost anything," Carrie Johnson, Forrester analyst says. "Which is why you see apparel do so well now and even computers do so well, because it's not just the early adopters buying online now. We've caught the second wave of online shopping."25

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Source: Case Study: Dell.com. Published by By James Maguire on March 3, 2003, at http://www.ecommerce-guide.com/news/trends/article.php/10417_2013731, accessed on March 13, 2006.

The just-in-time system that the company uses ensures that no computer is manufactured before a customer places an order. This eliminates the need for inventory of final products, which carry the risk of not being sold. Furthermore, in recent years, Dell has expanded this model from PCs to other products such as servers, storage, and printers, among others. "With our business model, it just does not make sense [to go off-shore], said Michael Dell. The value equation is better building close to the customer." 26 Different from other major companies in the PC Industry, Dell spends very little on R&D and doesn't even pretend to be a technology innovator. The companys expenditure in R&D is about 1% of their revenue, much lower than those of companies like HP or the former IBM that invest on average levels 5-6% of their revenues in R&D. Dell spends nearly half a billion dollars each year on research and development. It is about 1% of our revenue. The percentage is not high. But we use our R&D dollars very efficiently. Dell generated more than $9 in operating income for every dollar invested in research and development in 2004, explains Jeffrey Clarke, Senior Vice President and General Manager of Product Group27 Finally, Dell has been very loyal to the WINTEL technologies. All Dell computers use the Windows operating system and are powered by Intel chips, in fact Dell is the only major U.S. maker of PCs that hasn't come out with PCs powered by AMD chips. Dell summarizes its business model in 5 tenets28, shown in the box below (also see exhibit 11 Dell Business Model):

The Dell Business Model Most Efficient Path to the Customer: We believe that the most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost. We are organized around groups of customers with similar needs. This allows our teams to understand the specific needs of specific customers - without customer needs being "translated" by inefficient resellers and middlemen. Single Point of Accountability: We recognize that technology can be complex, so we work to keep things easy for our customers. We make Dell the single point of accountability so that resources necessary to meet customer needs can be easily marshaled in support of complex challenges. Our customers tell us they want streamlined and fast access to the right resources; direct provides just that. Build-to-Order: We provide customers exactly what they want in their computer systems through easy custom configuration and ordering. Build-to-order means that we don't maintain months of aging and expensive inventory. As a result, we typically provide our customers with the best pricing and latest technology for features they really want.

The Education of Michael Dell, by Andy Serwer in Fortune Magazine March 7, 2005 Unknown face of Dell -- Interview with Dell senior executives, by Yong Tang, published in People's Daily Online. 28 Source: Dell Webpage. http://www1.us.dell.com/content/topics/global.aspx/corp/background/en/directmodel?c=us&l=en&s=corp, accessed on March 13, 2006.
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Low-Cost Leader: We focus resources on what matters to our customers. With a highly efficient supply chain and manufacturing organization, a concentration on standards-based technology developed collaboratively with our industry partners, and a dedication to reducing costs through business process improvements, we consistently provide our customers with superior value. Standards-Based Technology: We believe that standard technology is key to providing our customers with relevant, high-value products and services. Focusing on standards gives customers the benefit of extensive research and development from Dell and an entire industry - not from just a single company. Unlike proprietary technologies, standards give customers flexibility and choice.

Evolution of Dell in recent years Dell started its internationalization in the 1990s. In 1992 Xerox signed an agreement with Dell to distribute its machines in Latin America, and the company opened subsidiaries in Japan and Australia in 1993. The company entered China in 1998 with the establishment of a production and consumer facilities. Nowadays, Dell distributes its products in more than 80 countries all over the world, but still derives some 50% of its revenue from the U.S. PC market. Between 1996 and 1999, the company benefited from the fact that PC sales in the U.S. climbed on average 16% annually. However, between 2000 and 2004, sales grew only at 3.6% per year. Nevertheless, during those years, the company did a strong effort to diversify and enter other segments. To reinforce such a move, the company changed its name from Dell Computer (adopted in 1987) to Dell Inc in 2002. Kevin Rollins: "I'll tell you why we think we're an underdog, and that is, we had been a PC company. We've been migrating the last three or four years out of being a PC company. We've moved into servers and storage, mobility products, services, software peripheral categories, and printers, and become a diversified IT company. If you look at those other categories, we're not the leader, we're not the biggest. So as we've built out a diversified IT portfolio, we're a small guy again, and it keeps this notion of the underdog, gotta struggle, gotta change, gotta do things for the customer."29 Among other businesses, the company has become one of the major sellers of printers in the United States. "Our goal this past year was to sell five million printers, and we did that," he says. "We now have about 20% of the inkjet-printer market in the U.S., which I think is pretty remarkable. That suggests to me that five or ten years from now this is going to be a very significant business for us in terms of revenues and profits." For now, Dell admits that margins are "not as great as the other businesses"' 30 Dell in China Dell first entered the Asia Pacific region in 1993 by investing in regional facilities, and in management, service and technical personnel in Japan and Australia. In 1995, Dell set up its first factory in the region, in Malaysia. These facilities, served the computers demanded in the whole Asia Pacific region with the exception of China and Japan. Dell direct sales operations are currently in 13 markets in the region: Australia, Brunei, China, Hong Kong, India, Japan, Korea, Macau, Malaysia, New Zealand, Singapore,
The Education of Michael Dell, by Andy Serwer, Fortune Magazine (March 7, 2005, accessed on February 3, 2006). Source: http://money.cnn.com/magazines/fortune/fortune_archive/2005/03/07/8253438/index.htm 30 The Education of Michael Dell, by Andy Serwer in Fortune Magazine March 7, 2005
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Taiwan and Thailand. In addition, 38 distributors serve another 31 markets31 (see exhibits 12, 13, 14, 15 and 16 for the Asia/Pacific leading PC companies in 2005 and the evolution of the Laptop Volume sales by ASP). During the 1990s, Dell realized the growing importance of the Chinese market. However, it was not until 1998 when the company shipped its first computer to China. In August of that year, Dell established the China Customer Center (CCC) in Xiamen, Fujian Province. In 1999, China was already the fifth-largest PC market, behind the US, Japan, Germany and the UK. Already at that time, John Legere, then president of Dell for the Asia-Pacific declared: If were not in what will soon be the second-biggest PC market in the world, then how can Dell possibly be a global player?32 In recent years, Dell has moved from being a producer in China to become a player in the Chinese market, though not without difficulties (nowadays, Dells positioning in China includes its China Customer Center, China Design Center and Dell International Service Center (China) in Xiamen, Shanghai and Dalian, respectively). The focus of Dell in China was state-owned enterprises, trying to nibbling into the traditional Chinese manufacturers providing solutions for these companies, Founder and Legend (Lenovo). Other companies such as Ford, Motorola, or Nortel that have already previous experience with Dell, mainly in the US market also became soon part of their customer base in China. In addition, to approach the Chinese market, Dell decided to launch a product to target first time users called Su Ma or Speedy Horse33. The Speedy Horse came only in three versions, ranging from the basic machine to the top-of-the-line. Before Lenovo completed the acquisition of IBM, Dell was the fourth-largest PC vendor in China, falling two spots from the No. 2 position held by the company in 2003 with a 7.2 share of China's PC market in 2004. Dell trailed market leaders Lenovo (25.1 percent), Beijing Founder Electronics (9.9 percent), and Tsinghua Tongfang (7.8 percent)34. IBM ranked No. 5 with a 5.1 percent share of the market, followed by HewlettPackard, with a 4.8 percent share of the market. Problems with Dell Business Model in China Dell implemented its direct sales model, so successful in other countries, in China. However, the Chinese consumers seem not to be very keen on the system. It takes nearly two years of a persons savings to buy a PC in China, and when two years of savings is at stake, the whole family wants to come out to a store to touch and try the machine 35. Also, "they need to consider how to penetrate the low-end market and the rural areas, because they don't have coverage there,"36 and this is not the type of client that will be willing to buy online.

Source: Dell at a Glance. http://www1.ap.dell.com/content/topics/topic.aspx/ap/corporate/en/factsheet/index?c=au&l=en&s=corp&~section=000, accessed on March 7, 2006. 32 Dell cracks China, by Neel Chowdhury, published on June 21, 1999 by Fortune Magazine. 33 Source: Will Dell click Asia?, published on April 22, 2002 in the BusinessWeek Magazine. Accessed online at http://www.businessweek.com/magazine/content/02_16/b3779132.htm on March 7, 2006. 34 Competition heats up for Dell in China's PC market, by Sumner Lemon, IDG News Service March 18, 2005. 35 Dell cracks China, by Neel Chowdhury, published on June 21, 1999 by Fortune Magazine. 36 Competition heats up for Dell in China's PC market, by Sumner Lemon, IDG News Service March 18, 2005.
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Furthermore, two other issues might difficult the use of Dell US model in China: first, critics said that Dell's practice of selling direct to corporate customers, rather than through distributors, wouldn't work in China, where salesmanship is based on wining and dining, not pointing and clicking; second, online sales normally require a credit card. However, credit cards are not so extended in China and lots of Chinese are still reluctant to use them. Some analysts were not convinced that Dell business model was going to have as good results for the company in China or other emerging economies. In fact, some of them suggested that it was time for the company to change. "We think Dell has been too focused on perfecting its existing model instead of adapting it to a changing environment," said Cindy Shaw, an analyst with Moors & Cabot Capital Markets. "What was working for them before is no longer working."37 "What Dell did was really brilliant," said Phil Asmundson, managing partner of Deloitte's U.S. Technology, Media, and Telecommunications practice. By creating a precision direct-sales structure, with each PC assembled specifically for each customer, Dell eliminated the need for inventory or middlemen and gave itself a built-in price advantage, which it in part keeps as profit and in part passes on to customers. Yet today that alone doesn't seem to be enough to fuel everrising growth38. However, the cost of changing Dells Direct model was huge, and not necessarily a recipe for success. Differently from Dell, Lenovo relied on a very extensive branch system and agents in China that helped them not just to sell to big corporations, but also to access the home user market as well as small and medium companies. But when some analysts proposed to Dell the adoption a dual system in which the direct model and the retail model coexist, the company automatically rejected that this might work. You can't do direct model and retail model at the same time. Any companies who are trying to do that will fail. Why? Because they are radically different approaches in how you run your business. We much prefer a direct relationship with our customers. we don't want a third party between us and customers. I don't ever see Dell going toward a retail model said Dick Hunter, Vice President of Americans Manufacture Operations and Supply Chain Management of Dell. 39 In fact, Dell tried to combine both systems in the United States in the early 1990s. In 1990, Dell entered the retail distribution through CompUSA (then, Soft Warehouse) and Staples (one year later). However, the retail margins and the time the money was in intermediation between the client and the distribution chain made had as an outcome that every computer sold by Dell this way resulted in a lost for the company. Just one year and a half later, the company decided to abandon it. "Every company needs to challenge and reinvent itself," Asmundson observes. The question for Dell is, How?40 About Lenovo
37 Dell's missing mojo, by Amanda Cantrell, CNN/Money (November 9, 2005, accessed on February 3, 2005). Source: http://money.cnn.com/2005/11/09/technology/dell_analysis/index.htm 38 Dell's Midlife Crisis, by Andy Serwer, Fortune Magazine (November 28, 2005, accessed on February 3, 2006). Source: http://money.cnn.com/magazines/fortune/fortune_archive/2005/11/28/8361935/index.htm 39 Unknown face of Dell -- Interview with Dell senior executives, by Yong Tang, published in People's Daily Online. 40 Dell's Midlife Crisis, by Andy Serwer, Fortune Magazine (November 28, 2005, accessed on February 3, 2006). Source: http://money.cnn.com/magazines/fortune/fortune_archive/2005/11/28/8361935/index.htm

The Lenovo Business Model Lenovo's business model is built on innovation, operational efficiency and customer satisfaction as well as a focus on investment in emerging markets41 stated Lenovos webpage. For William Amelio, the brand-new CEO of Lenovo, three steps were needed to consolidate the position of the company and be successful internationally. These three steps constituted the basis of the 3 Phase Plan outlined by Lenovo (see exhibit 5 Lenovos three phase business plan) "We must first keep a laser sharp focus on our cost and expense structure to continue to drive operating efficiency. Second, we must drive product competitiveness with innovative, high quality, appropriately priced products that address key growth areas. Third, we must leverage our success in China and the success of the dual transaction/relationship model in support of our products. I'm looking forward to building on the strong momentum Lenovo has delivered to date." 42 Lenovos business model relies on relevant innovation for the users. With that aim, the company seeks to develop technologies relevant both to small businesses and home users, as well as for medium and large businesses. Also, Lenovo recently launched its new innovation center, with the aim to catalyze customer collaboration in their new PC solutions. "Lenovo and its partners will use this center to make innovation relevant to our customers," said Deepak Advani, senior vice president, Lenovo. "It will create a hands-on facility dedicated to eliminating customer pain points, a place where professionals from numerous companies come together and focus on core business processes. Together, our companies offer a vast portfolio of expertise, hardware and software solutions, education, and services. The center will focus those resources on resolving specific customer problems."43 Operational efficiency was a major concern for Lenovo. "We want Lenovo to deliver profitable, sustainable growth everywhere we do business,"44 said William J. Amelio, president and chief executive officer of Lenovo. With that aim, in March 2006, the company launched a new plan in the quest of enhanced responsiveness to customers, global competitiveness and operational efficiency, through which the company expects to save US$ 250 million. "Our plan integrates Lenovos global sales organization and back-office support into one highly responsive customer-service unit, and ensures that, where it makes sense, teams are centralized for better performance and efficiency," said Mr. Amelio. "These steps position Lenovo as a more effective global competitor while supporting our commitment to lead in innovation and customer satisfaction," 45 Mr. Amelio said. As the final piece in their business model, to secure future growth, Lenovo will continue to rely on sales in China but it has set as a priority to increase its presence in other emerging markets to replicate its Chinese success, notably Brazil, India and Russia.
41 Lenovo Reports Third Quarter FY2005/06 Results, http://www.lenovo.com/news/ca/en/2006/01/3q_earnings.html, accessed on March 13, 2006. 42 Lenovo Reports Third Quarter FY2005/06 Results, http://www.lenovo.com/news/ca/en/2006/01/3q_earnings.html, accessed on March 13, 2006. 43 Lenovo Announces New Innovation Center, Designed to Catalyze Customer Collaboration for New PC Solutions, http://www.lenovo.com/news/us/en/2005/05/innovation_ctr.html, accessed on April 11, 2006. 44 Lenovo Announces Plan for Enhanced Responsiveness to Customers, Global Competitiveness and Operational Efficiency, http://www.lenovo.com/news/us/en/2006/03/actionplan.html, accessed on April 11, 2006. 45 Lenovo Announces Plan for Enhanced Responsiveness to Customers, Global Competitiveness and Operational Efficiency, http://www.lenovo.com/news/us/en/2006/03/actionplan.html, accessed on April 11, 2006.

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"In five years, you'll see a new Lenovo, the most competitive PC company [in the world]," Yang said. "We're hoping to grow twice as fast as the industry," Deepak Advani, senior vice president and chief marketing officer at Lenovo, added46. In addition, differently from Dell, Lenovo did not rely only on Intel as their source of microprocessors for the computer. AMD and Lenovo have had a relationship for the past two years in China, where approximately 50% of Lenovos desktop systems are powered by AMD processors, a relationship that the company was also planning to continue in other markets. Innovation is at the heart of what AMD and Lenovo do, and by offering a choice of AMD processors to Lenovos small and mid-sized business customers we continue to see our innovative AMD64 technology put to use for an expanding market of desktop users47 said Bryan Low, vice president, sales and marketing South Asia AMD. Evolution of Lenovo in recent years After achieving the first position in the Chinese market for PCs in 1996 (see exhibit 17 for the recent market share of Lenovo in mainland China), Lenovo climbed to the first position in the Asia-Pacific region (ex. Japan) in 1999. This regional expansion was the basis for the company to convince itself about its need to go global. In 2003, the company decided to change its name from Legend to Lenovo to prepare its expansion into the overseas markets. However, instead of developing a foothold alone, the company decided to also consider acquisition opportunities. Just one year later, at the end of 2004, IBM and Lenovo announced the Chinese company acquisition of IBMs Personal Computing Division business for $1.75 billion. After the acquisition was effective, Lenovo became the third largest PC Company in the world, after Dell and Hewlett-Packard (see exhibit 18 for Lenovo Sales by Geographical Area in 2004/5). On top of their Desktop and Notebook lines, Lenovo entered in the 2002 the mobile handset business, with a focus in China, the worlds largest cell phone market nowadays. There, the company has been very successful in positioning its brand as one of the market leaders, relying in new products and a sales channel expansion (see exhibit 19 for Lenovo Sales by Business in 2004/5). Lenovo's new Perfume Phone (which retails for the equivalent of about $210) is a mini sensation in inland cities like Chengdong and Jinan, where Western cosmetics are just starting to catch on with middle-class women. The clamshell phone works its magic by heating a small chamber filled with a few drops of a favorite fragrance, infusing your wrist (or purse or pocket) whenever the phone is turned on.48 With the success of products like the Perfume Phone, Lenovo has been able to compete with industry giants such as Nokia and Samsung. Lenovo is nowadays China's fourth-largest mobile seller and the fastest growing of the Chinese brands.

Lenovo to concentrate on SMB, emerging markets, http://www.itworldcanada.com/a/Enterprise-Infrastructure/1d9bbca0-d67742a5-8ce5-5bf02e841be9.html, accessed on April 11, 2006. 47 Lenovo gears up with AMD in Australian marketing drive, by Stan Beer 28 February 2006, http://www.itwire.com.au/content/view/3470/53/, accessed on March 1, 2006 48 Lenovo's Sweet Cell of Success, by Telis Demos November 28, 2005, Fortune Magazine
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The Entry of Lenovo in the US: the Launch of the 3000 series On February 23, 2006, Lenovo announced the launch of the 3000 series in the United States (see exhibit 20). The 3000 series was specially design to compete in the market for small and medium businesses in the United States, a market dominated by Dell and Hewlett-Packard. Dell and HP have moved into the China market first and took up a huge domestic market share. Now, after securing its own status at home, it is Lenovos turn to move into the U.S. market, just like how Dell and HP moved into China, Charles Chaw, director of China Knowledge explained49 This was a very important strategic move for Lenovo that for the first time launched a PC in a market outside China with its own brand. The Lenovo 3000 series, with desktops starting at a $399 and laptops at a $599, aimed to conquer the lower-end of the business market. Worry-free, great value, exciting/stylish' versus the ThinkPad messaging of 'rock-solid, lowest TCO [total cost of ownership], industrial-strength50, were the words used by Simon Yates, an analyst at Forrester Research to describe the new 3000 series. The small and medium business represents about two thirds of the business PC sales worldwide51, and analysts predict a strong growth for this market in the 2006 and 2007. Reliability is a critical characteristic to conquer these markets. "Consumers want the latest and greatest technologies, while small and medium businesses rely on their computers for competitive reasons, not just entertainment. Consumers might accept some problems because it's for their personal use; but if it's your bread and butter, it had better work right out of the box"52 Lenovo offered a technical support for the new series as well as similar software to the one offered on ThinkVantage IBM machines, the Lenovo Care Tools, which allows the users to manage their back-ups or restore the system just pressing one bottom, to cut down technical support bills. With this value proposition, Lenovo aspired to conquer part of the small and medium business segment in the US, a market traditionally controlled by Dell.

BBC interviews China Knowledge on Lenovos own-branded PC debut in U.S., published on Feb. 28, 2006 in China Knowledge. http://www.chinaknowledge.com/news-detail.aspx?id=2217, accessed on March 1, 2006 50 Source: First Lenovo-branded desktops and notebooks hit the market, by Aaron McKenna, published on February 23, 2006 in http://www.pcworld.com/news/article/0,aid,124829,pg,1,00.asp, accessed on March 6, 2006. 51 In an estimation of Simon Yates, an analyst at Forrester Research, Cambridge, Massachusetts. http://www.pcworld.com/news/article/0,aid,124829,pg,1,00.asp, accessed on March 6, 2006. 52 Said Richard Shim, a senior research analyst for IDC. http://www.pcworld.com/news/article/0,aid,124829,pg,1,00.asp, accessed on March 6, 2006.
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Exhibit 1. US PC Unit Shipments and Growth US PC Unit Shipments and Growth, 1999-2005 (Unit Shipments are in millions) 1999 United States U.S. Growth
Source: IDC

2000 48.4 7.3%

2001 45.3 -6.3%

2002 47.4 4.6%

2003 54.1 14.2%

2004 58.2 7.5%

2005 60.8 4.5%

45.1

Exhibit 2. Segment Analysis for Dell in 2005

Product Desktops Mobiles Servers Storage Services S&P Total Revenue Growth Y/Y Q/Q 1% 10% 22% 7% 10% 4% 41% 30% 26% 8% 22% 9% 13% 9% Unit Growth Y/Y Q/Q 4% 11% 47% 12% 11% 7% N/A N/A N/A N/A N/A N/A 15% 11%

Source: Dell Data, Credit Suisse Report Estimates, February 2006

Exhibit 3. Geographic Analysis for Dell in 2005
US$ in millions

F4Q05 Revenue by Region

US Business US Consumer $6,533 $2,359

F3Q06
$7,324 $1,901

F4Q06
$7,362 $2,393

F4Q05
16% 10%

Y/Y Growth F3Q06 F4Q06

10% -2% 13% 1%

Total Americas EMEA APAC/Japan Total

$8,892 $3,122 $1,443 $13,457

$9,225 $3,098 $1,588 $13,911

$9,755 $3,683 $1,745 $15,183

15% 22% 21% 17%

8% 19% 20% 11%

10% 18% 21% 13%

Source: Dell Data and Credit Suisse Report Estimates, February 2006

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Exhibit 4. Recent Evolution of Dell Stock

Source: Yahoo! Finance.

Exhibit 5. Lenovos 3 phase plan

Source: Lenovos Investor Relations

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Exhibit 6 Lenovos Management Team

YANG Yuanqing Chairman of the Board

Yang Yuanqing is chairman of the board of Lenovo Group Limited. Prior to assuming his current position, he was the president and chief executive officer of Lenovo. Mr. Yang joined Lenovo in 1989 and became CEO in 2001. Under his leadership, Lenovo has been China's best-selling PC brand since 1997. In 1999, Lenovo ranked as first in PC sales in Asia-Pacific (excluding Japan) and has maintained this position ever since. Mr. Yang also played a key role in Lenovo's transformation into a truly global company, leading Lenovo to become the International Olympic Committee's worldwide partner in March 2004. Mr. Yang was also responsible for spearheading Lenovo's landmark acquisition of IBM's PC business in May 2005, fulfilling the company's internationalization strategy and making Lenovo the third-largest PC manufacturer worldwide. Mr. Yang has been named by BusinessWeek magazine as one of the "Stars of Asia," and has been selected by the Chinese media as one of China's "Ten Star Entrepreneurs" and "Ten Most Valuable Managers." He was also named by CCTV as a "Man of the Year" in 2004. He holds a master's degree from the Department of Computer Science at the University of Science and Technology of China. Mr. Yang is also a member of the National Youth Association Committee, director of China's Entrepreneurs' Association, a guest professor at the University of Science and Technology of China, and a member of the New York Stock Exchange's International Advisory Committee. William J. Amelio is president and CEO of Lenovo Group Limited. Mr. Amelio joined Lenovo from Dell Inc. where since 2001 he served as senior vice president, Asia-Pacific and Japan, with responsibility for strategy and operations across the region. During his tenure, sales more than doubled in the region and service levels improved significantly, as measured by third-party customer satisfaction metrics. From 2000 until 2001, Mr. Amelio was executive vice president and chief operating officer of NCR Corporation's Retail and Financial Group, one of its two businesses. From 1997 to 2000, Mr. Amelio was with Honeywell International Inc. and its predecessor, AlliedSignal Inc., where he was president and CEO of Honeywell's transportation and power-systems divisions, and head of the turbochargingsystems business at Allied Signal. Under Mr. Amelio, the turbocharging-systems business doubled in revenues to more than $1 billion, implemented Six Sigma and SAP, and successfully integrated acquisitions. From 1979 to 1997, Mr. Amelio was with IBM, where he held a wide range of senior management positions, including general manager of Operations for IBM's Personal Computing Division. Mr. Amelio has a master's degree in Management from Stanford University and a bachelor's degree in Chemical Engineering from Lehigh University. Deepak Advani is senior vice president and chief marketing officer of Lenovo. Previously, he was the vice president of marketing for IBM's Personal Computing Division. His experience includes a strong blend of technology and business. With IBM for 12 years, Mr. Advani was part of the team that built a $1 billion supercomputer business in four years; and, as the vice president of Strategy and Market Development, he crafted IBM's early strategies around Linux. He was the general manager for the high-end Intel server business, where, under his leadership, IBM went from third in market share to first in two years. Mr. Advani has a bachelor's degree in Computer Science and a master's degree in Computer Engineering, as well as an MBA from the Wharton School of the University of Pennsylvania. He is on the advisory board at Michigan State University. He has lectured at several universities on the topics of business strategy, brand management, and personal leadership.

William J. AMELIO President and Chief Executive Officer

Deepak ADVANI Senior Vice President and Chief Marketing Officer

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LIU Jun Senior Vice President and COO, Global Supply Chain

Liu Jun is senior vice president and COO, Global Supply Chain, and oversees the company's global procurement, logistics, fulfillment and sales support, supply planning, strategy and manufacturing operations. Most recently, Mr. Liu was senior vice president and chief operating officer of Lenovo China, with responsibility for corporate planning and operation systems (purchasing, manufacturing, quality assurance and business affairs). While at Lenovo, Mr. Liu was the architect of the company's PC supply chain model. He also held a broad range of leadership positions in research and development, corporate strategy, the Desktop PC business unit, the Consumer IT business unit, and Integrated Supply Chain, giving him extensive experience in IT operations, research, development and marketing. Mr. Liu holds a bachelor of science degree in Automation and an EMBA master's degree, both from Tsinghua University. Liu Zhijun is vice president, Mobile Business Unit. He has been responsible for Lenovo's handheld device division since 2000, and for the company's mobile communication technology unit since 2002. Since joining Lenovo in 1989, he has built extensive expertise in the research, development, production, marketing, corporate operation and management of the mobile handset business as well as in PC sales, subsidiary company management and foreign brand product distribution. He holds a master's degree in Computational Mechanics from Dalian University of Technology.

LIU Zhijun Vice President, Mobile Business Unit Mary Ma is senior vice president and chief financial officer of Lenovo and a director of the company. She is responsible for finance, treasury, strategic investment, investor relations, and joint venture management and has more than 27 years of experience in financial and executive management, the past 15 with Lenovo. Prior to joining Lenovo, Ms. Ma held positions at the Chinese Academy of Sciences. Ms. Ma graduated from Capital Normal University with a bachelor of arts degree and continued her studies at King's College of the University of London. She is an independent nonexecutive director of Standard Chartered Bank (Hong Kong) Limited and Sohu.com Inc., both publicly traded companies. Mary MA Senior Vice President and Chief Financial Officer Ravi Marwaha is senior vice president, Geographies, with oversight of Lenovo's worldwide sales and service organization and responsibility for global customer relations and operations. Previously he was senior vice president, Worldwide Sales for Lenovo and before that, vice president, Worldwide Sales, for IBM's Personal Systems Group. Mr. Marwaha was with IBM for 36 years, primarily in sales and marketing, with assignments in manufacturing and development. A country general manager in India, he also worked in Australia, Japan, U.S. and Germany. His expertise covers hardware product sales, channel sales, emerging market sales, small and medium business sales, distribution channel marketing, marketing management, and profit center management. Mr. Marwaha was awarded a bachelor's degree in Mechanical Engineering with honors from the University of Jabalpur, India. He has completed management and executive education sponsored by the University of Virginia and IMD, Lausanne. He was the managing director of Tata IBM India and IBM Global Services India, director of IBM Australia Ltd., IBM Credit Corporation Australia Ltd., SSA Australia Ltd. He was president of the Indo-American Chamber, Bangalore, India.

Ravi MARWAHA Senior Vice President, Geographies

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Frances K. O'SULLIVAN Senior Vice President and COO, Product Group

Frances K. (Fran) O'Sullivan is senior vice president and COO, Product Group, with worldwide responsibility for all Think-, IBM- and Lenovo-branded desktops, notebooks, displays, options and services. Most recently, she was senior vice president and COO of Lenovo International (the operations of the former IBM Personal Computing Division). Previously, she was general manager of IBM's PC Division. Ms. O'Sullivan was with IBM for 24 years, the last 21 of them in the personal computer business. She began her career with IBM with an assignment to NASA's Space Shuttle Program at Cape Kennedy, Florida. She then transferred to IBM's PC Division and gained engineering and management expertise in development, manufacturing, procurement, and technical and business operations. Her long association with the PC Division includes general management of ThinkPad worldwide operations, leading ThinkPad worldwide development, consumer desktop development, and, most recently, developing and executing the Think strategy. Ms. O'Sullivan graduated from the University of Virginia with a bachelor's degree in Electrical Engineering and serves on the University of Virginia Engineering Industry Advisory Board.

Source: Lenovos Webpage, http://www.pc.ibm.com/us/lenovo/about/management.html

Exhibit 7. Worldwide PC Installed Base in 2005

Source: Gartner Research, 2005

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Exhibit 8. Preliminary Worldwide PC Unit Shipment Estimates for 2005 (Thousands of Units) All 2005 Geography Shipments EMEA Asia/Pacific Japan Canada Total 72,649 42,777 14,662 6,583 218,533 United States 67,153 Latin America 14,711

2005 Market Share (%) 33.2 30.7 19.6 6.7 6.7 3.0 100.0

2004 Shipments 62,014 62,443 33,947 11,671 13,635 5,829 189,539

2004 Market Share (%) 32.7 32.9 17.9 6.2 7.2 3.1 100.0

2005-2004 Growth (%) 17.1 7.5 26.0 26.0 7.5 12.9 15.3

Note: Data includes desk-based PCs, mobile PCs and X86 servers. Source: Gartner Dataquest (January 2006)

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Exhibit 9. Top 5 Vendors by Worldwide PC Shipments in 2005 (Preliminary Data) (Units Shipments are in thousands) 2005 Vendor Dell HP Lenovo Acer Fujitsu/Fujitsu Siemens Others All Vendors 3 Lenovo (Merged) Shipments 37,732 32,525 12,995 9,803 8,489 107,041 208,586 15,106

2005 Rank 1 2 3 4 5

Market Share 18.1% 15.6% 6.2% 4.7% 4.1% 51.3% 100.0% 7.2%

2004 Shipments 31,769 28,101 4,183 6,368 7,187 101,573 179,181 13,690

Market Share 17.7% 15.7% 2.3% 3.6% 4.0% 56.7% 100.0% 7.6%

Growth 2005/2004 18.8% 15.7% 210.7% 53.9% 18.1% 5.4% 16.4% 10.3%

Notes: Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold. PCs include Desktop, Notebook, Ultra Portable, and x86 Servers. PCs do not include handhelds. Data for all vendors are reported for calendar periods. Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in 2Q05, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005.

Source: IDC, January 18, 2006

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Exhibit 10. Top 5 Vendors, Worldwide PC Shipments, Fourth Quarter 2005 (Preliminary) (Units Shipments are in thousands) 4Q05 4Q05 Rank 1 2 3 4 5 Vendor Dell HP Lenovo Acer Fujitsu/Fujitsu Siemens Others All Vendors 3 Lenovo (Merged) Shipments 10,539 9,564 4,414 3,302 2,535 30,745 61,100 4,414

Market Share 17.2% 15.7% 7.2% 5.4% 4.1% 50.3% 100.0% 7.2%

4Q04 Shipments 8,774 8,257 1,257 2,165 2,058 29,675 52,186 3,919

Market Share 16.8% 15.8% 2.4% 4.1% 3.9% 56.9% 100.0% 7.5%

Growth 2005/2004 20.1% 15.8% 251.3% 52.5% 23.2% 3.6% 17.1% 12.6%

Notes: Shipments include shipments to distribution channels or end users. OEM sales are counted under the vendor/brand under which they are sold. PCs include Desktop, Notebook, Ultra Portable, and x86 Servers. PCs do not include handhelds. Data for all vendors are reported for calendar periods. Data for Lenovo includes shipments for IBM PCD (including Desktop and Portable PCs and excluding x86 Servers and Personal Workstations) starting in 2Q05, and only Lenovo data for prior quarters. This reflects the legal status of the companies, which merged during the second quarter of 2005.

Source: IDC, January 18, 2006

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Exhibit 11. Dell Direct Model

Source: Dell Webpage, http://www.dell.com/downloads/global/corporate/vision_national/direct_model_poster.pdf

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Exhibit 12. Asia/Pacific (ex. Japan) PC Shipments by Vendor, Full Year 2005 (Preliminary)
Rank 1 2 3 4 5 Vendor Lenovo HP Dell Founder Acer Others Total Lenovo (merged) 2005 Market Share 2004 Market Share 18.00% 12.00% 11.60% 10.10% 8.30% 7.00% 5.70% 5.30% 5.40% 4.30% 51.00% 61.30% 100% 100% 19.20% 18.70% Annual Unit Growth 76.70%* 36.40% 39.50% 27.50% 48.00% -2.00% 17.90% 21.20%

* This figure includes the growth due to the IBM Acquisition Source: IDC, January 2006

Exhibit 13. Asia/Pacific (ex. Japan) PC Shipments by Vendor, 4Q05 (Preliminary)

Rank 1 2 3 4 5 Vendor Lenovo HP Dell Founder Acer Others Total Lenovo (merged) 4Q05 Market Share 21.50% 10.90% 8.90% 6.10% 5.60% 47.00% 100% 19.20% 3Q05 Market Share 19.90% 12.20% 7.70% 5.90% 5.90% 48.40% 100% 18.70% 4Q04 Market Share 13.30% 10.00% 7.20% 5.60% 4.40% 59.50% 100.00% 21.20% Year-on-Year Unit Growth 92.2%* 28.70% 48.20% 28.60% 52.60% -6.10% 18.90% 30.10%

* This figure includes the growth due to the IBM Acquisition Source: IDC, January 2006

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Exhibit 14. Market Share in Asia By Company

Source: Gartner Research, 2005

Exhibit 15. Market Share in Asia By Form Factor

Source: Gartner Research, 2005

23

Exhibit 16. Evolution of the Laptop Volume Sales by ASP

Exhibit 17. Evolution of Lenovos Market Share in Mainland China

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Exhibit 18. Lenovo Sales by Geographical Area

Source: Lenovo Investor Relations

Exhibit 19. Lenovo Sales by Business

Source: Lenovos Webpage

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Exhibit 20. Introducing the Lenovo 3000 Series in the United States

Lenovo is announcing a new PC product line with innovations targeted to meet J Series desktops are the needs of small business and individuals. equipped with your choice of Intel or AMD On February 23, Lenovo is launching the Lenovo 3000 line, beginning with the processors. Get J Series desktops and C series notebook PCs. Lenovo 3000 desktop and exceptional levels of notebook PCs are for small businesses that want to focus on running their power, performance and business, not their computers. And the Lenovo 3000 line offers PCs that are reliability for all your not only a great value, they're stylish as well. home and business computing needs with our new J Series Designed by many of the same world-class engineers that bring you desktops. ThinkPad notebooks and ThinkCentre desktops, the Lenovo 3000 Family offers dependable machines with the software, hardware and price to help growing businesses meet customer needs and stay ahead of competition. Lenovo 3000 J Series desktops are available in the tower form factor, and come preloaded with software suitable for the small

Ready to buy Shop/learn more about Lenovo 3000 Family J Series desktops C Series notebooks

Lenovo 3000 worry free computing for small business "Worry-free" means that Lenovo 3000 offerings have several features and service and support that improve the PC computing experience. After all, business people want to focus on running their business, not their computer. Lenovo Care and service & support available from IBM is a task-based solution that brings together the most common computing tasks with the click of a button.

business.

One-button system recovery - Recover from a virus at the click of a button. Automatic updates - The Lenovo Care environment can be configured to automatically download and install critical updates Your system updates itself... so you can keep working. Easy network connectivity and management (mobile) - No other PC makes getting and staying connected easier.

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For notebook users, the Lenovo 3000 C100 notebooks offer stylish design and essential software tools for your small business. C100 notebooks are equipped with Intel Pentium M or Celeron M processors

Attractive prices - A range of technologies are available at local retailers and resellers and on the Web in select countries. Thoughtful design - Stylish, up to date, functional PCs come equipped with the worlds best keyboards.

Featured demos

Announcement

In late March, Lenovo 3000 brand will deliver the N100, a stylish widescreen notebook combining popular features at an attractive price. The N100 will be available in 14.1-inch- and 15.4-inch- wide models. All Lenovo 3000 PCs include Lenovo CareSM, a software application that helps your computer recover from viruses at the touch of a button, update itself and enable it to easily connect to wireless networks.

View the Lenovo 3000 product demonstrations J Series desktop C Series notebook

Lenovo 3000 press release Learn more

Think products and Lenovo products The Lenovo 3000 portfolio of desktop and notebook PCs complements Lenovos award-winning ThinkPad and ThinkCentre brands. ThinkPad notebooks and ThinkCentre desktops, along with ThinkVantage Technologies are flexible enough to help enterprises or small businesses manage their PCs. The Lenovo 3000 line is designed especially for small businesses who do not have IT departments. Lenovo is providing the personal computers that help them focus on improving their business results, not on managing their PCs. All at attractive price points. It's a new kind of computer for a new kind of world. From a new kind of company.

Source: http://www.pc.ibm.com/us/3000/index.html?re=home_A_us, accessed on March 7, 2006

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