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Lenovo CEO: sales growth in 'virgin' markets

The PC market is changing rapidly, with emerging markets expected to account for much of the industry's growth in coming years, Lenovo Group's top executive says.

Emerging markets are "where the action is," says William Amelio, president and chief executive officer of Lenovo Group, during a speech at the Global Entrepolis conference in Singapore.

Between now and 2010, four countries -- Brazil, India, Russia and China -- will account for 49 percent of an expected rise in PC shipments, he says. And the opportunities in emerging markets extends beyond these four countries. PC shipments in emerging markets will grow at twice the rate of shipments in developed countries.

To take advantage of this opportunity, vendors have to "embrace" and understand emerging markets, Amelio says.

Lenovo is counting on its roots as China's largest PC maker to help boost sales in emerging markets.

In China, Lenovo largely relied on "transactional" business model, whereby the company focused on selling batches of computers with a given price rather than developing long-term relationships with corporate buyers, Amelio says. This strategy in India has helped Lenovo ramp up sales quickly..

Measured by units shipped, Lenovo was the third-largest PC vendor in India during the second-quarter of 2006, market analyst IDC recently stated. Accounting for ten percent of shipments during the period, Lenovo trailed market leader Hewlett-Packard and HCL Infosystems.

Outside emerging markets, the transactional approach to the market has helped reinvigorate Lenovo's business in Germany, where the company has seen two quarters of greatly improved growth after eight quarters of lacklustre performance, Amelio says. Down the road, the same model will be applied in other countries alongside existing operations focused on building long-term relationships with corporate customers.

"If it works in a high-cost country, it should sure work across the world," Amelio says.