Chinese computer giant Lenovo Group aims to further expand its presence in China by creating new market demand and building brands, although the firm already has more than a third of the market cornered.

Lenovo said yesterday that it would respond to customers' service demands in two hours and fix problems on the second calendar day in more than 1,250 cities in China, 365 days a year the first computer firm to offer this level of service and coverage in the country.

Chen Shaopeng, senior vice-president of Lenovo and president of Lenovo China, said his company would also visit 100,000 customers to assess demands and help solve problems with their Lenovo computers.

"This is the best season for computer sales, but we want to bring more value to our products with services, while some companies are hot on price wars," said Chen in an interview yesterday.

Summer is usually the peak sales season for computers as students return home from schools or universities and computers are a favourite pastime for many. Computer makers at this time usually launch new products, cut prices or offer free gifts to lure buyers.

However, Huang Yong, a senior technology industry analyst with domestic research house CCID Consulting, said a more far-reaching effect of Lenovo's move is the creation of new demands from consumers in smaller cities, rural areas and from elderly customers.

According to the National Bureau of Statistics, almost 80 per cent of families in Beijing had a computer at the end of 2004, but in the neighbouring Inner Mongolia Autonomous Region, the rate was less than 20 per cent.

"It seems to be extremely difficult for companies like Lenovo, with more than 30 per cent of (the market) share, to further expand its share, but the potential in smaller cities and rural regions is huge," Huang said.

CCID Consulting predicted shipments of computers in China would grow to 30 million units in 2008, from last year's 20 million units.

Huang said the demand for technology products both from enterprises and consumers in the so-called fourth- and fifth-layer markets, mainly counties, has significantly increased.

However, people living in smaller cities and rural areas often have difficulties fixing computer problems due to a lack of services.

"Service is the key to developing customers in these markets, as nobody wants to wait for days for technical assistance to come or not to come at all," said Huang.

Lenovo's Chen said his company has more than 2,000 stores, 600 service centres, and 57,000 engineers across 1,250 cities, the most comprehensive distribution and service network among all computer vendors.

Most computer companies offer one- or three-year post-sale service during working days, but in a limited number of cities.

And as Lenovo works on penetrating more geographic areas across the country, luring customers who have yet to buy a computer, US giant Dell aims to provide wider choices to its customers.

Dell was previously a loyal partner of Intel's, but recently said it would also adopt microprocessors from Intel's smaller arch-rival AMD.

Lenovo joined forces with AMD in 2004, launching computers at 2,999 yuan (US$375). The AMD partnership has been so successful that 80 per cent of Lenovo's consumer computers used AMD's processors last year.

Dell's alliance with AMD has allowed the firm to provide products at lower prices for consumers in smaller cities or rural regions. The US computer giant has also been able to win business customers amid rising demand for AMD's processors, which support 64-bit processing technology and dual-core processors.

Source: China Daily