Lenovo Group, the world's third-largest personal computer maker, has introduced a new PC priced at a record-low 1,499 yuan (198 U.S. dollars) to further tap into the demand in rural regions.
"We have offered rural distributors products priced between 1499 and 2999 yuan," said Chen Shaopeng, president of Lenovo Greater China, adding that new software developed to cultivate rural customers' computer literacy was part of the PC products.
The company announced that it would establish 5,000 new marketing agencies to expand after-sales services to a maximum of 300,000 administrative villages. Meanwhile, the company would carry out promotional campaigns in townships, said Chen.
The move was not driven by a sense of charity. "We continue to invest in the rural market because it helps us achieve a growth rate double the market average," Chen said.
After cutting costs worldwide by shedding 1,400 jobs - five percent of its global workforce - the company said on Thursday its net profits had increased 12-fold in the first quarter to 66.84 million U.S. dollars from 5.21 million U.S. dollars in the same period of last year.
Lenovo's major rivals HP and Dell have so far remained silent on the move but "they will probably come up with due measures in the near future", Friday's Beijing News quoted anonymous analysts as saying.
Three years ago, Lenovo released computers priced at 2,999 yuan to cultivate what it termed the "frozen earth" in rural regions. Its rivals had to match the price in order to continue their expansion into the rural market.