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HEADLINE: China's Lenovo To Go To India For Software, Sales Expertise; Plans New "Innovation Center'; Buyer of IBM PC business plans to sell more products outside of its home country

BYLINE: BY DOUG TSURUOKA

BODY: Lenovo, China's top PC maker, plans to harness the skills of Indian software engineers and marketers.

Deepak Advani, Lenovo's senior vice president and chief marketing officer, said in an interview Tuesday that the company, which bought IBM's PC business in May, plans to open an India "innovation center."

No site or date has been set, but planning is under way, says Advani.

The center will develop PC applications and marketing strategies. It marks one of the first major efforts by the Chinese PC industry to hook up with the tech expertise of the world's other fast-growing economic power, India.

The site will complement a similar center in Beijing that Advani says will open in a few weeks. Another innovation center is up and running in Raleigh, N.C.

"India is next," Advani said, in remarks following a press conference in New York City on Tuesday. It was Lenovo's first major press conference since the IBM unit purchase. Executives updated the unit's progress and announced plans to sell cell phones and other products outside China. They didn't identify the U.S. as one market but hinted at that possibility.

Also Eyes Russia, Brazil

In the past, Lenovo has said it will make a strong bid to sell its products in the U.S. and in such emerging markets as India, Russia and Brazil.

At Tuesday's event, company Chairman Yuanqing Yang said he expects Lenovo to "become the most competitive PC company in the world."

The plan for an Indian center is aimed at what some analysts say is a Chinese weakness: software innovation.

While Lenovo and other Chinese firms excel in hardware, their software development has lagged compared to India.

Advani says the center will tap the skills of Indian engineers to develop PC applications. He says Indian staffers will also draw up marketing strategies aimed at emerging markets.

"India is definitely the opportunity for software development going forward," Advani said.

He says the India center will develop PC solutions for clients in cooperation with IBM and major IBM partners Intel and Microsoft.

Talent Pool

Though China and India have differing cultures, Advani notes that China is going through a growth stage that India has passed. Like India a decade ago, Advani says, the fastest-growing markets in China today are centered in smaller regional centers rather than big cities.

And like China, 95% of all business in India is influenced by business partners. As such, he says, Indian marketers can provide valuable advice.

He also sees a big pool of marketing talent in India that Lenovo can tap. Before, top marketers usually left India for overseas jobs. But now that India's economy has taken off, Advani says Indian execs "see a lot of opportunity in staying in India."

In other news, top Lenovo executives said the company is mulling selling its cell phones, digital cameras and MP3 players outside China.

Also, Lenovo executives said most of the estimated 10,000 IBM workers it got with the PC unit purchase have stayed on. They said attrition has been less than 5%.

LOAD-DATE: September 14, 2005

Shows the growing importance of India in the business world.

Thanks & regards.

Rajan.

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Let's make India a better place !