Lenovo Group should abandon its low-end desktop computer business and focus on developing high-end laptops to boost profit margins, a US marketing strategist said at a forum in Beijing Saturday.

Al Ries, chairman of Atlanta-based consultancy Ries & Ries and coauthor of bestseller Positioning, said Lenovo's net profit margin slumped to 1.2 percent in 2010 from 4.8 percent in 2005 after it acquired IBM's personal computer (PC) business, mainly due to its diversified strategy. 

"Lenovo should focus on developing the ThinkPad brand it acquired from IBM into high-end laptops, instead of strengthening its own Lenovo brand, which has low awareness among overseas customers," he said. 

But Ries' view seems to be in contrast with Lenovo's development strategy. Its chairman Yang Yuanqing said last week that the company will have full commitment to the PC market in the long term, as well as increase investments in emerging sectors like smartphones, tablets and smart TV, after Lenovo reported a net profit growth of 88 percent year-on-year in the second quarter due to robust PC sales in emerging markets such as China. 

Some Chinese IT experts rebuffed Ries' suggestion. 

"His theory is not based on the market demand especially from China, where low-end products still have growth potential," Wang Jiping, a PC analyst at research company International Data Corporation, told the Global Times Sunday. 
 

Source:english.peopledaily.com.cn