latest financial results once again confirm that China's largest
computer maker made a big mistake buying IBM's loss-making PC division,
at least as far as investors are concerned. And, for a listed company,
that's all that counts at the end of the day.

Lenovo, the worlds third largest PC maker, said profit dropped 16%
to $38m in its fiscal Q1, which was below what analysts had forecast,
while revenue rose a mere 1%, to $3.7bn.

The only growing lines were notebooks, which increased 7%, and
wireless phones, where sales grew 13%. Those gains were offset by a 6%
drop in desktop sales and weakness in the Americas, where revenue
slumped 9%. More in this BusinessWeek story.

The good news came from China. Lenovo's home market now accounts for
39% of sales and shipments there grew 25% over the previous year.

But the contrast between its continuing success back home and its
lacklustre performance elsewhere, has financial analysts scratching
their heads as to why it bought IBM's PC business and whether Lenovo
will ever start firing on all cylinders. Brent Bracelin of Pacific
Crest Securities told BusinessWeek:

Stable consistent success in China is encouraging, but more progress
needs to be made in the Americas and in Europe, the Middle East, and
Africa before a more constructive stance can be taken on the company. I
think Lenovo really bought a legacy business with business practices to

Another analyst, quoted by Bloomberg, was more scathing. Francis Lun of Fulbright Securities said.

Nobody has heard of Lenovo outside China, that's a big problem. The
company has another three more years to use the IBM name. Until then,
if they fail to establish the brand, it's finished. Game over for them.”

It looks like the brief honeymoon that Lenovo enjoyed with western media and analysts following the IBM deal is definitely over.

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