President and chief executive William Amelio predicted that the company's server line would 'quickly become a profitable business'.

The Shenzhen-manufactured ThinkServer family, which comprises three towers and two rack-mounted models, is based on x86-based server technology licensed from IBM Corp, which sold its personal computer business to Lenovo in 2005.

'Lenovo is now delivering a full suite of product offerings for small and medium-sized businesses from desktops to notebooks to servers,' said Marc Godin, vice-president and general manager of the company's enterprise business unit.

Mr Godin said Lenovo provided 'a scalable offering' to fit the varying needs of enterprises, ranging in size from one to 500 employees.

Prices for the ThinkServer line, which consists of one- and two-processor machines, start at US$749. Each computer uses Intel's Xeon processor, Lenovo's proprietary management software, and either Microsoft's Windows Server or Novell's Suse Linux Enterprise Server operating system.

IBM's x86 is the industry's most commercially successful computer hardware architecture.

'Lenovo's ThinkServers deliver rock-solid engineering and easy-to-use software all developed specifically for the SME customer,' said Mr Godin.

He noted that the new servers would not be sold on the mainland because its Lenovo-branded servers would continue to be supplied to the domestic market.

But in a recent Asia-Pacific server market report, research firm Gartner wrote: 'Technology providers should prepare for a slowdown in information technology spending in large markets, such as China, Australia and India.'

It cited economic slowdown and high inflation in emerging markets as having some impact on information technology spending.

'We have realistic expectations as we enter this market, but we're very positive about achieving our internal goals,' said Mr Godin.

In the second quarter, Gartner estimated total server sales in the Asia-Pacific at US$2 billion on shipments of 390,758 units.

The mainland accounted for 43.5 per cent of all server sales. Hewlett-Packard and Dell were among the top-sellers of low-cost x86-based servers geared for SMEs in the region, according to Gartner, making up about 51 per cent of the region's total server sales.

'SMEs are more resilient than big corporations in terms of information technology spending, so Lenovo - like HP and Dell - still sees some areas of growth, even though it will be an increasingly tough market for all vendors,' JP Morgan analyst Charles Guo said.

The ultimate goal for Lenovo is to catch up with the world's top-selling server players IBM, HP, Dell and Sun Microsystems, each of which delivers a wider range of servers - from low-cost machines to expensive high-performance systems.

According to research firm International Data Corp, revenue in the global server market grew 6.4 per cent year on year to US$13.9 billion in the second quarter, led by the big four United States-based brands.

'While all the major vendors exhibited strong unit growth, there was significant price competition throughout the second quarter,' said Jed Scaramella, senior research analyst at IDC. 'Low-end volume servers are somewhat viewed as commodities and experienced the most pricing pressure.'

Although late in the international server arena, Lenovo 'has the advantage of having plenty of distributors and resellers worldwide who are keen to work with the company', Mr Godin said.

'We're working to strengthen these relationships and build new ones in all our markets. Eventually, Lenovo will extend manufacturing of its server line in its overseas factories to be closer to its target SME customers.'

Mr Godin said production was being planned for new plants in Mexico and Poland.