Lenovo May Eye U.S. Consumer PC Market

The buyer of IBM's PC business could take on HP and Dell in the consumer arena, but some analysts are skeptical.
In addition to shaking up the business-computing market, IBM's sale of its PC business unit to Lenovo Group Ltd. could have a big impact on the consumer PC market in the United States.

In an interview, Peter Hortensius, VP of IBM's personal computing group, says Lenovo may consider entering the U.S. consumer PC market, the same market IBM exited in the late 1990s. Noting that Lenovo is already a major player in the Chinese consumer market, Hortensius says the company's "scale, skills, and capabilities in that area give us opportunities that may have been difficult to pursue as part of IBM." Hortensius is joining Lenovo, along with a number of other senior executives from IBM's PC group.

Lenovo "would look at the U.S. consumer market," Hortensius says. However, don't expect to see Lenovo computers at Best Buy or Circuit City anytime soon. The company, if it were to make such a move, would more likely sell directly to consumers through the Internet. as opposed to seeking retail channels, Hortensius says.

Some analysts say Lenovo's low-cost manufacturing operations in Beijing, combined with the cachet of IBM's brands, could help the company thrive in the ultracompetitive consumer PC market. When it takes control of IBM's PC business, Lenovo will have PC sales revenue of about $12 billion, making it the world's third-largest PC vendor.

Others remain skeptical about a consumer PC sales push, noting that the consumer-focused efforts of large Asian PC vendors such as Acer Inc. have been met with limited success in the United States amid stiff competition. Brooks Gray, a Technology Business Research analyst, says, "At the end of the day, they would still have to contend with Dell and HP."

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