Lenovo to drop IBM brand

Big jump in profits boosts confidence at China's largest PC maker

Simon Burns in Taipei, vnunet.com 02 Nov 2007

Lenovo, the world's fourth largest PC maker, plans to stop using the IBM logo to which it acquired the rights when it purchased IBM's PC division three years ago.

The company has decided to phase out the brand after better than expected results, executives said.

"By making substantial progress on all of our critical priorities over the past few quarters, we are now a stronger, healthier company," said Lenovo chief executive William Amelio.

"One important sign of this progress is our decision to completely transition our Think products from the IBM brand to the Lenovo brand two years earlier than planned."

Lenovo sales rose 20 per cent to $4.4bn in the third quarter of 2007 compared to the same period a year ago, while profits surged 178 per cent to $105m.

Following a rocky start, the results suggest that Lenovo's efforts to merge itself with the former IBM PC division are bearing fruit.

As the company struggled to integrate the extremely different IBM unit, Lenovo was overtaken by Taiwanese rival Acer in the battle for the third spot in global PC manufacturing rankings behind Dell and HP.

Acer poached US PC maker Gateway and its European affiliate Packard Bell earlier this year, when Lenovo appeared set to take over one or both of the firms.

Lenovo chairman Yang Yuanqing stated that the company is entering "a new phase of profitable growth".

"[We will] continue to tap the growth potential of the PC industry, especially in China and other emerging markets, the SMB and consumer segments in mature countries, and the notebook market worldwide," he said.

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