A strategy by Lenovo Group to sell computers at do-it-yourself (DIY) prices will probably prompt its mainland rivals to follow suit.
In its latest promotion, China's largest computer maker is selling basic PCs for between 2,999 and 5,999 yuan each, targeting lower tier non-urban users who are highly price sensitive. The move comes amid efforts by the PC giant to refocus on its core business and defend market share.
'Lenovo's pricing is as competitive as DIY prices,' International Data Corp vice-president and analyst Kitty Fok said.
The new prices are the company's lowest. In top markets such as Beijing and Shanghai, available models start at 4,999 yuan each.
The difference in Lenovo's 2,999 yuan model is the components. A processor from Intel has been dumped in favour of one from AMD. In addition, it has just 128 megabytes of double data rate memory and a 40-gigabyte hard drive.
The cut-price PC is possible because Lenovo struck special deals with five suppliers: AMD, Taiwanese motherboard maker VIA Technologies, United States hard-disk drive manufacturer Maxtor and Hong Kong-listed monitor maker Proview International Holdings.
Lenovo president and chief executive Yang Yuanqing said the series of low-cost computers targeted small township areas previously overlooked by computer brands.