Bill Amelio, CEO of PC maker Lenovo, is striving to make the Chinese firm a global brand, he tells John Collins

THE SCENES of protesters outnumbering supporters at the Olympic torch relay runs in London, Paris and San Francisco can't have been easy viewing for Lenovo's president and CEO, Bill Amelio. As well as being one of 12 main sponsors of the Beijing games, at a reported cost of $100 million, the PC manufacturer also beat off 300 competitors to design the torch which was the target of protesters' ire.

Speaking in Dublin this week, where 1,000 Lenovo executives from Europe, the Middle East and Africa have gathered for their annual sales conference, Amelio said the company hasn't had any second thoughts about its involvement in the games.

While he says he would like to "see a peaceful resolution" to the conflicts in Darfur and Tibet which attracted the protests, he feels the protesters crossed a line.

"I think what happened in Paris was a real travesty - that someone tried to pull the torch from a wheelchair athlete," says Amelio. "The Olympics should really be above the geopolitics of the world."

The Chinese firm's involvement with the Olympics, and other high-profile sports sponsorships with Brazilian footballer Ronaldinho and the Williams Formula One team, are all part of its efforts to become a household brand. Even Amelio will admit that when Lenovo acquired IBM's loss-making PC division for €990 million in 2005, thus becoming the world's third largest PC manufacuter in one fell swoop, brand recognition was an issue.

That can't have been a familiar problem for Amelio, an engineer by training who spent 22 years with IBM and, before joining Lenovo, ran Dell's operations in the Asia-Pacific region. While Dell is synonomous with the direct selling model, Amelio is perfecting the "transactional model" that proved so successful for Lenovo in China that it made it the number one computer seller by a long shot.

At first glance the model, which involves using resellers to sell large volumes to small- and medium-sized businesses, does not seem that innovative. The key according to Amelio is to have the right product configurations, partners, prices and planning in place, but also to manage the amount of inventory with a "maniacal focus".

Such a keen attention to detail seems to be paying off. Lenovo had a profit of $172 million on revenues of $4.6 billion in the quarter to the end of December last.

Although, as Amelio forcefully reminds his interviewer, Lenovo does not provide guidance on its likely future performance, at that time Amelio said the company had "momentum" and was more insulated from shocks to the US economy due to the percentage of its revenues derived from developing countries.

"Five or six years ago, the model was this - if you had new computers you sold them to mature markets, if you had second-hand computers you sold them to emerging markets," says Amelio. "That's the furthest thing from the truth now. If you are a consumer in Bangalore or Boston, everyone wants the same quality."

To serve this global market Lenovo has adopted a model it dubs "worldsourcing". The company has no corporate headquarters: US national Amelio is based in Singapore, while his Chinese chairman Yang Yuanqing is located in North Carolina.

"The data is in now that shows diverse cities are more productive, diverse companies tend to be more innovative so we've said that early on we would embrace our diversity rather than getting a homogeneity," says Amelio.

Taking the concept of outsourcing and turning it upside down, Lenovo has created hubs of excellence from Bratislava to Beijing. Rather than simply moving manufacturing to economies like India and China, Lenovo sees them as potential markets to sell into but also ideal locations for high-value activities such as marketing and product design.

Amelio also reveals that at the same time he is sitting down to speak to The Irish Times, Yang and Milko Van Duijl, president of Lenovo in Europe, the Middle East and Africa, are meeting Irish government officials to discuss the possibility of Lenovo moving some of its operations to this country. The availability of high-calibre graduates, experienced technology workers and low corporation tax are among the reasons he gives for the company's interest. "Lower tax rates always attract businesses," he deadpans.

The ubiquity and low cost of the PC has been a double-edged sword for manufacturers. Sales volumes are increasing, particularly for notebooks, but margins are razor-thin.

"I still believe we are in a growth phase but in a maturing market there are two things you have to be good at: operational efficiency and customer intimacy," explains Amelio. He gives Procter & Gamble as an example - combining operational excellence with the ability to sell washing powder with slightly different features to many different types of customers. He concedes that no computer company has managed to recreate P&G's efficiency but says his aim is that Lenovo will become the first.

A key partner in that effort will be Microsoft whose ubiquitous Windows operating system ships on the vast bulk of Lenovo products. The delays and criticism levelled at its latest incarnation Vista, most recently by senior Gartner analysts, must be a concern?

"It hasn't affected us as far as sales go," says Amelio. Even though the company offers Linux as an alternative on all its systems, the take-up is "very small".

"Every time there has been an operating system change with Microsoft there's been a lot of issues and rhetoric but people work through it and all of a sudden it becomes an effective system," says Amelio. "Would I like it to have zero problems? You bet I would." Despite this he says large corporate deployments of Vista are still thin on the ground - "I think the bow wave of that is still in front of us and will start in '09 or '10," he concedes.

A surprise success for Lenovo is its "rural PC" designed for Chinese farmers which has solidified its position as the leading PC vendor in the world's most populous country. "It hits a much different price position but still has enough features that it's attractive to the farmer," says Amelio. It ships without a monitor - instead it connects to the farmer's TV - and online applications provide information and gather data on herd and crop management.

Lenovo has also been garnering positive reviews for its ultraslim ThinkPad X300, which is just 70g heavier than an Apple MacBook Air but has features as standard such as a DVD burner that the Air lacks.

Amelio says the company is also diligently trying to break open a new piece of the market - the five billion people who have never owned a PC. "The fact is if you get to the right price point with something that has the right utility, you could open up computing to a lot more people," says Amelio.