[Thinkpad] Lenovo Drops IBM

Lenovo Earnings Jump, Will Ditch IBM Branding Early
From the VAR magazine

 By Edward F. Moltzen <emoltzen@cmp.com>, CMP Channel
5:58 AM EDT Thu. Nov. 01, 2007

    PC maker Lenovo said Thursday its revenue for its most recent quarter
jumped by 20 percent and its profit attributable to shareholders almost
tripled compared to the same quarter a year ago, noting that it is seeing
steady growth in the Americas and that its notebook lineup remains a key
driver.

The Raleigh, N.C.-based Lenovo, which is listed on the Hong Kong stock
exchange and which announced its earnings before dawn Eastern Time, said its
revenue reached $4.4 billion for its second fiscal quarter, compared to $3.7
billion for the year-ago quarter. Its profit attributable to shareholders
was $1.05, compared to 38 cents for the year ago quarter.

At the same time, Lenovo CEO William Amelio announced the company, which
acquired IBM (NYSE:IBM<http://www.crn.com/tools/quotes/index.jhtml?Page=QUOTE&Ticker=IBM>)'s
PC unit more than two years ago but which had an agreement in place to use
the IBM brand on ThinkPads for several years, would switch completely to the
Lenovo brand.

"One important sign of (our) progress is our decision to completely
transition our Think products from the IBM brand to the Lenovo brand two
years earlier than planned," Amelio said in a statement. Lenovo is planning
a major branding initiative through co-sponsorship of the 2008 Summer
Olympic Games in Beijing.

After closing the deal to buy the IBM PC business in 2005, Lenovo and IBM
both announced that Lenovo would have the right to use the IBM logo on
ThinkPads and some desktops for several years following. While Lenovo has
said previously it believed it was on track to migrate away from the IBM
brand earlier than expected, Lenovo CFO Wong Wai Ming, meeting with analysts
in Hong Kong to discuss earnings, made it clear:

"We are discontinuing the use of the IBM logo in our products," he said. The
analyst meeting was webcast.

During the quarter, Lenovo's notebook shipments grew by 78 percent worldwide
compared to the year-ago period, and executives said product shipments grew
in all geographies.

Lenovo reported the results following a quarter marked by heated competition
from rivals including Acer, which recently closed out its acquisition
ofGateway (NYSE:
GTW<http://www.crn.com/tools/quotes/index.jhtml?Page=QUOTE&Ticker=GTW>)
and which fended off Lenovo's attempt to buy France-based Packard Bell.
Still, Lenovo reported that Lenovo is sitting on about $1.7 billion in cash,
versus $990 million a year ago.

In the Americas region, which includes the U.S., Lenovo's turnaround
continued. The company said it saw a profit of $21 million in the region
during the quarter, compared to a loss of $18 million for the same quarter a
year ago. It was the third straight quarter that Lenovo grew market share in
the U.S.

Amelio, in the analyst meeting, said Lenovo's "transaction business" in the
Americas - - which includes the commercial reseller channel - - grew by 47
percent in the quarter.

"We're increasing our presence (with) the tier 2 resellers that serve the
small and medium sized business," Amelio said during the analyst meeting. He
said a new program, "Club Lenovo," which provides products and other
incentives to solution providers in exchange for selling Lenovo PCs, was
working to help grow U.S. sales.

-- 
________
I believe everything happens for a reason.
Usually, the reason is that sombody screwed up.
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