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Lenovo Outlines IBM ThinkPad Strategy

China's Lenovo Group is beginning to shed light on its short-term growth plans after agreeing to buy IBM's PC business.

Executives speaking at this week's Consumer Electronics Show in Las Vegas said they are adopting an "aggressive yet prudent growth strategy" during the five-year transition. IBM will still maintain a stake in its consumer business. The $1.75 billion deal for IBM includes an 18.9 percent stake in Lenovo, the leading PC maker in China.

Bob Galush, vice president of product marketing in IBM's PC division, told internetnews.com the plan is to establish a worldwide distribution initiative outside of China and into North America and Europe -- places where Lenovo is not a household name.

"We have the enviable position of immediately having a market share that will be in the mid-30s," Galush said.

The IT market in China is the fastest growing among the world's top economies. Within this market, IBM estimates services and software are contributing to an estimated compound growth rate through 2006 of about 20 percent.

As part of its short-term strategy, Galush said Lenovo is also committed to the continued development of ThinkVantage Technologies, which reside in IBM's ThinkPad notebooks and ThinkCentre desktop models.

"What I have been telling customers is that they will see no change," Galush said. "The client team continues to cover the PCs. The PC specialists or the specialists on the PC products will be the same ones customers are used to having a relationship with."

Galush said the companies will have to wait for a few more weeks before they can formally start the arduous process. Chinese and U.S. government regulators are reviewing the terms of the deal, which is not expected to finalize until the second quarter of 2005.

"We have to go and look at all of their products and then start looking around the globe to see where there are opportunities to sell them," Galush said.

Despite the delay, Lenovo wasted no time in contacting its channel partners and corporate customers. Right after the deal was announced, Galush said a group made up of new Lenovo CEO Stephen Ward and a host of other top-level executives made the rounds with partners and corporate customers ensuring a smooth transition and making sure that the integration is effective.

Galush said customers fell into three categories: people who want Lenovo to broaden the product line; people who don't want Lenovo to change a thing; and people who are avoiding the whole situation.

"Most fall into the first two categories, which is good considering our key competitors have been installing some [fear, uncertainty and doubt]," Galush said.

Beyond the better-known airbag and biometric additions to the ThinkPad lineup, Lenovo is developing a technology called Antidote. Expected to be included in next-generation PCs released after October, the technology lets a user or administrator clean out all the systems of a network and block them from re-infection.

Galush said Lenovo is also carrying over IBM's Access Connections, which is a connectivity package to store profiles. In addition to its Rapid Restore Ultra disaster recovery software, IBM is developing its Embedded Security Subsystem for new Lenovo notebooks.