Busy with consolidating IBM Corp.'s high-end ThinkPad legacy after it acquired the American company's PC division in 2005, Lenovo was late to the consumer party. The company had not pushed aggressively into the global consumer PC segment until recently. Although the consumer PC market has been growing faster than the commercial one during the last few years, Lenovo only introduced its consumer laptop line, IdeaPad, last March. Despite that the company took more than a year to design and produce the line, analysts believe the IdeaPad line lacks clear-cut product positioning strategies.

"Most of Lenovo's IdeaPad laptops, especially models shipped overseas, are with high-end features and very similar to the ThinkPad line in design and pricing," said He Lin, an analyst at information technology research company Gartner Group Inc.. "Lenovo should be more innovative to make the IdeaPad series distinguished from the commercial ThinkPad line," he added.

While deliberately pushing high-end models outside China to showcase its technological prowess and challenge the stereotype of Chinese companies as mainly producers of cheap, low-end products, Lenovo missed some opportunities to rival its major competitors in the low-cost PC market both within and outside the country.

Sales of low-cost laptops grew rapidly last year, fueled by the success of the EeePCs manufactured by Taiwan's ASUSTek Computer Inc. At a cost of $300-$500 per unit, EeePCs gained popularity among young customers and proved to be a success at the end of 2007. Acer and HP soon introduced their own low-cost laptops. This allowed Acer, which was a step ahead of HP in rolling out a range of low-cost laptops, to make gains in the global consumer PC segment.

Spring of hope

Lenovo's failure to gain ground in major consumer markets outside China and its dubious product positioning strategies point to internal problems, said Qu Xiaodong, General Manager of Beijing-based China ComputerWorld Research.

After acquiring IBM's PC business, Lenovo retained all the division's senior executives and hired former Dell executives for their experience in supply chain integration. It also opened factories in Mexico and Poland. Yet, its luxurious multinational management lineup has failed to create a synergy or significantly grow in its non-China business, Qu said.

Lenovo also is looking to merge its China, Russia and Asia-Pacific operations into a single unit to be led by Chen Shaopeng, who currently runs its Greater China operations. It plans to relocate its call center operations from Toronto to Morrisville, North Carolina.

The company increasingly will depend on the new Asia-Pacific operations, which currently account for 60 percent of its total revenue, to fuel its growth, promote its sales worldwide and reshape its path toward becoming an international player, Qu said.

The company also has looked at other companies that could offer distribution channels to expand outside China. "We are keeping an eye on every possible candidate for acquisition," Lenovo's former CEO William Amelio said at the World Economic Forum in Davos on January 31.

While pledging a sufficient supply of products targeting different market segments this year, Amelio said that Lenovo would introduce more low-price computer models, because consumers have become more price- sensitive during the economic slowdown. He added that the company expected major sales growth in emerging markets such as Brazil.

Amelio also said Lenovo would benefit from the Chinese Government's stimulus plan to subsidize farmers who purchase basic home appliances such as PCs under selected brands and models, including the Lenovo brand. The company already has organized a team to work on the plan, he said.