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Lenovo plans $199 PC aimed at Chinese market

PC manufacturer Lenovo announced on Friday that it intends to begin offering a …

PC manufacturer Lenovo announced on Friday that it intends to begin offering a $199 system aimed at China's vast rural population. At $199, the desktop unit would include a PC, mouse, keyboard, and operating system, but would use the owner's television for a monitor. Worldwide, Lenovo is the third-largest PC manufacturer behind HP and Dell, but the company is growing rapidly: shipments in the last quarter grew 22 percent, compared to a 13 percent average industry growth rate.

Lenovo isn't the only manufacturer with its eye on the rural Chinese market, as Dell has already announced plans to offer systems ranging from $223-$515 in that segment. Lenovo's own offerings will be somewhat cheaper at $199-$399, and the company obviously feels it can leverage its strong position in Chinese sales and understanding of the market.

The relatively small difference in price between Dell and Lenovo shouldn't be discounted, as rural yearly income in China averages less than $500 a year. Lenovo is also going to get aggressive about promoting its offerings, as the company plans to build a rural sales network of 5,000 dealers to reach their customers. 

One bit of information not yet available is what OS Lenovo and Dell plan to offer with these ultra-budget systems. Microsoft just slashed the cost on many Vista versions in China, and the software giant would obviously like nothing better than to accustom the 800 million rural Chinese to the Windows operating system. While the Microsoft price cuts were aimed at the retail market, Lenovo could take advantage of Microsoft's other programs aimed at seeding the developing world with Windows. One such program would outfit computers with Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0, Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail desktop, for an average cost of $3 per machine.

Given the price point both Lenovo and Dell are trying to meet, however, Linux may be the better option, as it generally performs better on lower-end hardware. Also, as OLPC and Intel have shown, customizing the Linux OS to fit a specific hardware profile and usage scenario can lead to impressive results, as Troy noted when he checked out the Mandriva-based Classmate PC

Certainly it would do wonders for the Linux market share if Dell or Lenovo chose to offer it as a primary option. 800 million potential users, after all, is nothing to sneeze at.

We hope to hear more about the configuration of these machines as the launch date moves closer.

Further reading

Channel Ars Technica