Lenovo targets emerging markets to boost revenues

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Lenovo targets emerging markets to boost revenues

Warwick Ashford

Chinese PC maker Lenovo is to switch its attention to selling low-cost computers to developing countries to boost flagging revenues.

In January, Lenovo announced it was to cut 2,500 jobs worldwide due to the global economic downturn.

Lenovo hopes to save $300m with the job cuts to compensate for falling PC demand as a result of "unprecedented global economic challenges", the PC maker said.

Lenovo posted a $96.7m loss for the fourth quarter of 2008, but former chief executive Yang Yuanqing has returned to the role he left in 2004 with an aggressive recovery strategy.

Yang, who has been serving as Lenovo chairman, takes over from William Amelio, who resigned as chief executive after his three-year term ended. He will stay on as a special adviser until September.

A key part of Yang's strategy is to deploy a large salesforce to promote sales of low computers to the retail market in south-east Asia, India, Poland and Turkey.

According to Yang, it is only these emerging markets that will be able to give Lenovo the growth it is looking for.

This approach contrasts with the long-term corporate focus of the IBM PC-making business Lenovo acquired in 2005 $1.25bn.

Analysts predict sales of PCs across the world are likely to fall this year for the fist time in almost 10 years with sales for the final months of 2008 plummeting by more than18%.

The Europe, the Middle East and Africa (EMEA) region has seen a decline as regions other than Western Europe cut PC spending.

According to IDC, growth in PC sales in EMEA slowed from 20% in the first nine months of 2008 to 1.8% in the last quarter. Growth in Western Europe was still positive at 12%, sales dropped by 24% in Central and Eastern Europe, and remained flat in the Middle East and Africa.


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