Lenovo has unveiled its Lenovo 3000 series of desktops and notebooks with prices and popular features aimed at the small and midsize business users that its Think product line has missed.
As expected, the new Lenovo-brand machines, starting at $349, will come with functions such as one-button disaster recovery and one-button Wi-Fi connectivity. They will offer a selection of processors—Lenovo 3000 desktops will offer both Intel and Advanced Micro Devices chips— as well as prices and ease-of-use features that Lenovo executives said will differentiate them from the herd.
The 3000 series is aimed at addressing the small business end of the market, where Lenovo's ThinkPad and ThinkCentre, primarily built for midmarket and enterprise businesses, have captured only 5 percent of the market, said Craig Merrigan, vice president of Lenovo's Strategy, Market Intelligence and Design Division.
Overall, Lenovo grew 12 percent in the fourth quarter of 2005, but lagged behind the bulk of the market, which grew at 18 percent.
"We're missing out on the biggest growth piece of the market—the SMB," Merrigan said. "This addresses that missing piece, where growth is the fastest. The market is growing so fast [in the SMB] and has yet to consolidate, that there's room for one more offering."
Click here to read more about the Lenovo's 3000 series.
"The way to interpret this whole thing is it's the debutant ball," said Roger Kay, president of Endpoint Technology Associates, of Wayland, Mass. "It's the coming out of the new brand. It's coming through some new channels and it raises the profile of the company, polishes up the Lenovo brand a bit and from there they can branch out some."
Much of winning in the SMB market involves getting products in front of buyers, analysts have said. To that end, Lenovo aims to reach out with a new two-tier channel program through distributors, including an effort to recruit thousands of new SMB VARs, Merrigan said.
As part of the new channel program, Lenovo will add new pricing structures, education, training programs and "soft" money for marketing. The organization also expects to reallocate personnel to build an in-house sales unit supporting the SMB channel, Merrigan said.
The company will use its channel program in China, where more than 6,000 storefront dealers sell the Lenovo SMB line and the company enjoys 55 percent market-share as the benchmark for the new effort.
Lenovo expects to reveal details on its new channel programs, including support, education, training, margins and requirements at IBM's PartnerWorld conference, which runs between March 12-16.
Meanwhile, the company will market its Lenovo 3000 series via retail. It will be available at 1,000 Office Depot retail outlets in the United States.
But the company has not yet pursued other retail placement, Merrigan said. Office Depot has as sold Lenovo's ThinkPad since November.
Aside from attempting to create a new delivery system for its products, Lenovo said it has tailored its 3000 series' pricing and functionality to fit the needs and constraints of SMB customers, said Sam Dusi, vice president of Lenovo's notebook division.
"If you're a small business, I would encourage you to check the pricing of other companies," he said. "Compare it on value and no one is offering you a better value."
Next page: Lenovo turns up the competitive heat among SMB vendors.
Indeed, the arrival of Lenovo in the SMB market will bring greater competition in the SMB space—a hotly contested area because of its sheer size—as Dell and Hewlett-Packard will find it necessary to protect their territory in the United States, Kay said.
Lenovo might also threaten companies such as Acer, Fujitsu-Siemens and NEC in regions such as Europe, he added.
"I think it turns up the competitive heat in the SMB segment and it probably has an effect on margins that is negative," Kay said.
That's because it's "about market-share. That's what it's designed to do. Every other market [aside from large businesses] is pretty green field for them. They need to go beyond [big businesses] and grow. I think this represents the bid to do that."
"There is room for them [in the market]," said Jim Locke, a president at J.W. Locke and Associates, a small business VAR and founder of the Small Business Technology Network.
"HP can be complex to navigate and manage while Dell is looking more like a competitor each day and seems to have quality issues that we are experiencing in the field," Locke said.
"Perhaps, a new player is what we need to iron things out in the space. The question is whether Lenovo will be competitive or not. I've got my fingers crossed."
Lenovo 3000 J Series 105 desktops, which offer AMD's chips, will start at $359, while its Lenovo 3000 C Series notebooks will begin at $599, both relatively low prices for their respective categories.
Lenovo's first Lenovo 3000 notebook, the C100, will offer a 15-inch screen with Intel Pentium M processors and wireless networking.
Aside from offering low prices, Lenovo designed its 3000 line to make it easier for small shops to work with their computers and to easily get technical support if they need it, Dusi said.
"We are focused on this idea of the worry-free dialogue," he said. "Most of the businesses don't have an IT staff. The time you spend keeping up and running, leaves tremendous room for us to differentiate ourselves in the market."
Lenovo Care, a pop-up resource center, provides quick access to productivity features such as Wi-Fi connectivity in "two clicks" and one-button recovery from crashes.
Lenovo has also packaged the boxes with applications such as Google Tool Bar, Corel Word Perfect and Draw and Norton AntiVirus.
The Lenovo 3000 machines are priced and configured differently than Lenovo's Z Series ThinkPad, which starts at $799, and its ThinkPad R Series starts at $749. It has also been marketing the two machines to SMBs.
The PC maker will follow up with N Series and V Series notebooks. An N100 line is expected to offer 14.1-inch and 15.4-inch widescreen displays, along with Intel processors.
Its V100, arriving later in the first half of 2006, is expected to be a smaller, more lightweight system that offers a 12-inch widescreen.
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