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Lenovo Moves Ahead with IBM Deal
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Chinese computer maker Lenovo Group has sped up consolidation with IBM's PC business, and formed a unit in India to transfer its success in China to other emerging markets.
Yang Yuanqing, chairman of Lenovo, the world's third largest computer maker, said his company would start the second stage of the consolidation process from October 15, eight months ahead of schedule, according to Saturday's China Daily.
The Chinese firm acquired IBM's personal computer business in December, including the famous Think brands of notebooks and desktop computers.
During the first stage of the consolidation process, Lenovo Group's original business and the former IBM business ran separately under the names Lenovo China and Lenovo International to avoid drastic changes to customers and the organization of the company.
"The process will take at least five months, so we can have a smooth operation in organizing the management and a stable increase in our business in domestic and international markets," Yang said on Friday.
Chen Shaopeng, vice president of sales in the Chinese market, said there would not be any layoffs in the consolidation in China, where Lenovo and IBM had two separate groups of staff, distribution channels, and management teams.
Eagle Zhang, general manager of the domestic research house Analysys International, believes Lenovo's successes in the first half of this year made the company confident in accelerating consolidation.
"It is just like the usual Lenovo tactic: first test the water and then push it aggressively," said Zhang.
According to international market researcher International DataCorp, Lenovo's shipments grew at three times the market average in the second quarter and its market share reached 34 percent in China.
Lenovo says it will build a unified management platform for product design and development, supply chain, and sales.
Yang said his company also saved US$10 million in May and June thanks to the integration of procurement for Lenovo and Think products.
The Chinese computer giant will also reorganize its regional organization and set up five regional headquarters.
Apart from existing bases in the United States, Europe, the Middle East, Africa, and the Asia Pacific region, Lenovo will set up a China regional unit, a result of the consolidation of Lenovo China and Lenovo International.
The company will also set up an India headquarters, highlighting the importance of emerging markets like India, Russia and Brazil.
Yang had just visited India and Dubai of the United Arabic Emirates.
(Xinhua News Agency October 1, 2005)
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