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LENOVO KICKS OFF A "TOWNSHIP COMPUTER POPULARISATION PROGRAM

   

(Hong Kong, August 3, 2004) - Lenovo Group Limited ("Lenovo") (SEHK: 992) today announced the official launch of its "Township Computer Popularisation Program". Jointly with five partner suppliers, Lenovo introduced a new consumer PC series called "Yuanmeng" and an e-classroom solution, both with outstanding performance and highly attractive price-to-performance ratio, targeting ordinary households and the education sector in township areas respectively. This strategic move will fuel the next round of growth of the China PC market.

Yang Yuanqing, President and CEO of Lenovo, said, "Since adopting the strategy of focusing on its core PC business, Lenovo has further integrated its internal and external resources, strengthened its competitive strengths in the PC market, and adopted effective customer segmentation strategy to forge stronger ties with customers. With our successful grasp of customer needs in township market and by our own strengths, Lenovo is able to make this strategic move. We are well positioned to fully capture the township market which offers tremendous growth potential, and hence further strengthen our market leadership."

At today's announcement conference in Beijing, Lenovo was joined by representatives of its five partner suppliers, including Mr. Marty Seyer, AMD Corporate Vice President and General Manager, Computation Products, Ms. Karen Guo, AMD Corporate Vice President, President and General Manager of AMD (China) Co., Ltd., Mr. Morris Wang, Vice Chairman and Vice CEO of Group, Proview International Holdings Limited, Mr. James Hsu, Vice Chairman of Elitegroup Computer System Co., Ltd., Mr. Paul Hsu, Vice President of VIA Technologies Inc., and Mr. Kurt Richarz, Senior Vice President of Maxtor Corporation.

The Chinese township areas have immense volume growth potentials in PC consumption and they are gradually superseding mid-sized and major cities for prime growth driver of the China PC market. Their development, however, has been hampered by constraints in application, quality, services and price. To meet the demand of this newly emerging market, Lenovo is introducing the competitively priced "Yuanmeng" consumer PC series. "Yuanmeng" computers carry Lenovo's quality service guarantee and are advanced in ergonomic design, featuring applications tailored to satisfy learning, entertainment and Internet surfing needs at home. The computer series includes four models at affordable prices, ranging from RMB 2,999, RMB 3,799, RMB 4,299 to RMB 5,999, and with very attractive price-to-performance ratio.

In addition, pinpointing the needs of primary and middle schools in township areas, Lenovo is introducing an e-classroom solution which removes the three major usage hurdles for the education sector. Firstly, the Group is able to achieve a breakthrough in price. Lenovo's customers only need to pay RMB 100,000 for an e-classroom solution which includes 40 PCs and offers performance matching solution priced at RMB 150,000. Secondly, Lenovo eases the common concern of the education sector about after-sales services by extending its original commitment of "3-year maintenance and 3-year on-site support" to 5 years' maintenance of several core components. Lastly, Lenovo's e-classroom solution offers a basket of comprehensive applications making teaching and learning more enjoyable for teachers and students.

Yang said, "We are able to lead the market in introducing the new computer products to customers in township market not only because we have the advantages in scale and operations, but also because of the support we gained from our partner suppliers. With these advantages plus our stringent quality control, comprehensive distribution channels and nationwide service support coverage, the Group is ready to embrace another round of growth in the China PC market."

With a new and more customer-oriented organisation structure, Lenovo has constructed a strong distribution system with a total of 108 grids in 18 sales regions across the country, penetrating deeply into cities and towns. The Group's comprehensive service model also covers the entire country including rural areas, achieving the high standard of offering maintenance service within 48 hours for 300 cities.