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Lenovo launches £99 PC

Targets rural China with low-cost system

Lenovo last week launched a family of basic PCs starting at £99.

Launching the PCs, intended for rural Chinese farmers, is part of Lenovo's three-year effort to grab greater market share in China by reaching beyond urban areas with low-cost PCs, a suite of agricultural software applications and a sales network of 5,000 dealers in small towns, according to a statement by Chen Shaopeng, a senior vice president at Lenovo and president of its Greater China division.

Lenovo claims it has already sold 4 million computers to rural users through this "YuanMeng" campaign, a Chinese term meaning "to realise the dream of owning a PC".

On Thursday, company executives gave much of the credit for their soaring quarterly profit to a 30 percent increase in PC shipments to domestic Chinese markets. Those sales helped push Lenovo to a $67.8m profit for the quarter, a tenfold improvement over the same period last year.

Lenovo has struggled to become profitable since acquiring IBM's PC division in 2005, but in the most recent quarter reported double-digit shipment growth in every geographical region. The company's profit was also helped by a corporate reorganisation and deep job cuts.

By reinforcing its domestic Chinese sales, Lenovo could also gain an advantage over rival Acer, which is based in Taiwan. Lenovo is the world's third-largest PC vendor, but faces stiff competition in the region from Acer, which is in fourth place and catching up fast, according to figures from IDC.

Lenovo did not announce a product name or specifications for the new PCs, but said it would sell them for $198, $264, $330 and $396.

By setting prices so low, Lenovo is also sending a signal to competitors such as the nonprofit OLPC (One Laptop Per Child) project and chip-making giant Intel. Both companies have designed low-cost PCs designed for users in developing countries, including OLPC's XO laptop for $176 and Intel's Classmate for $225.

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