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Lenovo Revs Up Retail Push

The PC vendor is expanding its relationship with retail powerhouse Best Buy.

PC maker Lenovo announced Thursday it is expanding its deal with Best Buy for Business, and said it would add a second notebook line to its offerings through the retail outlet in 300 locations.

At the same time, Lenovo's vice president of worldwide and Americas channels, Stephen Mungall, said the Raleigh, N.C.-based company would begin offering new online tools for its solution provider partners and move more of its channel resources from under the IBM umbrella to Lenovo's own organization. Lenovo bought the former IBM PC Co. almost two years ago, and recently its executives have said it would begin relying much less on IBM's marketing infrastructure under that deal.

The Best Buy arrangement follows on the initial deal which rolled out last April, when the companies began offering one ThinkPad model in Best Buy for Business locations and online. Lenovo's top executives have made success in the U.S. and the Americas region a priority, after sales in the geography lagged its operations in the rest of the world toward the end of 2006. Lenovo lost money in Americas during the fourth quarter, but gained market share worldwide.

"We're expanding the (Best Buy) relationship to include two units, as opposed to the one, and actually give the ability (for customers) to take some of those units home with them," Mungall said. "Last year, if the customer wanted it, they ordered it on site but it got drop-shipped to their home. The pricing methodology will be consistent with the channel," Mungall said, adding that Lenovo has worked to ensure there is no "price-disjointedness" between what Best Buy can offer and what solution providers can offer.

Lenovo will now provide ThinkPad T60s with widescreen displays, as well as its Lenovo 3000 N100 models to Best Buy for Business. The systems are preloaded Microsoft's Vista Business operating system, and have Lenovo's system management application suite, ThinkVantage Technologies and Lenovo Care, respectively.

While the PC maker continues working to grow sales via retail as well as through its web site, Mungall said Lenovo continues to target growth through solution providers in 2007. A first step will be to provide additional online sales tools for solution providers via a new web portal, Mungall said, which will be available in about two weeks. In addition, Lenovo will bring its online "reseller locater" under its own web infrastructure; currently, Lenovo provides a link from its web site to a reseller locater on IBM's web site. In September or October, Mungall said, Lenovo will also provide a partner conference for its solution providers independent of IBM's Partnerworld conference which Lenovo joined last year.

"We've got to make sure our partners understand what we have to offer, what our direction is," Mungall said. "We've got to get our partners understanding what is going on, understanding our offerings. Clearly we still have a very robust traditional VAR strategy -- versus retail -- that we rely on heavily, that we want to continue to nurture that we want to continue to get growth out of."

Joe Vaught, chief operating officer of PCPC Direct, a Houston-based solution provider and Lenovo channel partner, said he is encouraged by efforts the PC maker is undertaking.

"The Best Buy thing doesn't thrill me, but I expected it," Vaught said. He lauded Lenovo's strategy of working to eliminate bureaucracy in its organization, and to provide more efficient online tools and resources. "They are spending money streamlining process, where it's not (going to be) such a manual process. Our business with Lenovo is going very strong, and getting stronger by the day. I'm hoping this online improvement for the channel will help."

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