ThinkPad returns to retail
By Michael Singer
Staff Writer, CNET News.com
Published: November 3, 2005, 12:40 PM PST
The ThinkPad is gearing up for its return to retail, starting with a partnership announced Thursday between Lenovo and Office Depot.
Consumers will be able to purchase either a ThinkPad Z60t widescreen or a ThinkPad T43 with biometric fingerprint readers starting Nov. 6, China's Lenovo Group said. The laptops will retail starting at $699--a 50 percent price drop from their usual $1,399 price tag online. The computers are expected to compete with similar designs from Office Depot's other PC suppliers: Hewlett-Packard, Sony and Toshiba.
It's the first time IBM computers have sat on store shelves since the Armonk, N.Y.-based computer giant backed out of the retail business in 1999 in favor of a direct-sales model. ThinkPad laptops are almost exclusively sold online except for a handful of showrooms, such as RSC Experience on Madison Ave. in New York.
It's also the first major retail initiative by Lenovo since its $1.25 billion purchase of IBM's personal computer assets in the spring, and probably not its last, according to analyst Sam Bhavnani with research firm Current Analysis.
"This is a nonexclusive deal, which means Lenovo will more than likely announce additional retail partnerships early next year," Bhavnani said. "Retail is messy, but Office Depot is a good start for Lenovo because they would only have three competitors to share shelf space with."
Likely candidates for future Lenovo retail contracts include Staples, Office Max and Costco because of its small business focus, Bhavnani said. BestBuy could also be a contender because of its recent focus on small-business customers.
Lenovo will need to be mindful of pricing, Bhavnani added, because Office Depot does drop its prices drastically. The retailer's latest circular advertises Toshiba and Compaq laptops with Intel Celeron processors for $599. Office Depot also offered a $399 Compaq Presario about a month ago.
Office Depot said it will also retail ThinkPad models belonging to the X Series and R Series, as well as Lenovo's X41 Tablet 12-inch convertible tablet.
ThinkPad computers in the hands of consumers is a concern to Lenovo's competitors, Bhavnani said, because HP's retail strategy is focused on consumers and small businesses and Dell is finding itself with a competitor with a sought-after product.
Though Lenovo is not a household name, ThinkPad has its own reputation, and the computer maker is building on that through its partnerships with well-known companies like Office Depot.
Lenovo outlined a broad restructuring late last month, as it attempts to integrate its own China-focused business with the vast global business of its new IBM assets. Executives said the company would shift from IBM's direct marketing relationship sales to more transactional sales targeted at small to medium-size businesses.
China is now the world's second-biggest PC market, with 15.8 million units shipped last year and expected growth of more than 14 percent this year and in 2006, according to IDC.
Lenovo controls about a third of the market, following the IBM purchase.