PC-maker Lenovo to phase out Games link

BEIJING - Computer-maker Lenovo, China's only global Olympics sponsor, will end its top-level support after next year's Beijing Summer Games, the company said.

A brief statement Tuesday on the company's Web site said it was refining its global-marketing effort, but it gave no specific reason for the decision to let the relationship with the Olympics expire after next year's Games.

"As Lenovo grows, the company's marketing strategy is evolving to pinpoint opportunities that serve strategic needs in targeted geographies," it said.

Officials at Lenovo could not be reached for comment yesterday.

The Beijing company has announced ambitious plans to step up Olympics-related marketing ahead of the Beijing Games in August.

It was the first worldwide sponsor to design the Olympic Torch, which will be carried on the worldwide relay ahead of the Games. Lenovo also contends that it is providing the largest computer-hardware commitment to any Olympic Games in history - about 20,000 machines and peripheral equipment, including desktop and notebook computers to be serviced by a team of 500 technicians.

Veterans in the sports-marketing industry said the decision to end the sponsorship seemed natural given that the Olympic tie-up had been a strategic move at a time when Lenovo was seeking to establish its brand after acquiring IBM Corp.'s personal-computer unit in 2005.

Lenovo Group Ltd., now the world's No. 3 PC-maker, nearly tripled its profit in the latest quarter to $105 million on strong sales in China and the Americas.

"Originally, [the Olympic link] aligned quite well with the overall strategy. Now that the objective has been achieved, they are looking again at their priorities," said a Beijing-based international sports-marketing veteran, who asked not to be identified by name because he was not authorized to speak on behalf of either company.

Global sponsorship is the highest level of Olympic sponsorship and limited to about a dozen companies willing to pay top dollar to associate their brands with the Olympics worldwide.

Lenovo and the International Olympic Committee have refused to disclose how much the company's sponsorship cost, but analysts estimate it paid $80 million to $100 million in cash and services for the three-year cycle covering the 2006 Turin Winter Olympics as well as the Beijing Games.

Olympic global sponsorships remain highly desirable, and their price tags continue to climb, partly as a result of the IOC's decision to limit the numbers.

That should appeal to the growing number of Chinese brands, especially large state-owned banks and other companies that have launched spectacular stock market offerings this year.