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Written by: Staff

SAN FRANCISCO, Apr 21 (Reuters) Lenovo Group Ltd. <0992.HK>, the Chinese computer maker that bought IBM's PC business last year, plans to hold off selling PCs to U.S. consumers until it establishes itself among U.S. business customers, Chairman Yang Yuanqing said on Thursday.

The company, the world's third-largest computer manufacturer and China's biggest, is focusing on selling its ThinkPad-branded models to large U.S. commercial customers and expanding among small and mid-sized businesses, Yang told reporters at a briefing in San Francisco.

In the United States, ''the first area we should focus on is the SMB segment,'' Yang said, referring to small and medium-sized businesses. ''For the consumer business, maybe we could have tele-Web sales,'' or direct sales by telephone and the Internet.

But Lenovo will not start selling computers to U.S. consumers, a market dominated by Dell Inc. and Hewlett-Packard Co.

, until next year at the earliest, Yang said.

Lenovo grew the fastest of any major PC maker in the first quarter after it bought International Business Machines Corp.'s personal computer business in May, 2005, for $1.25 billion.

The company claims 6.4 percent of the worldwide PC market, according to researcher IDC, compared with market leader Dell Inc.'s 18.1 percent and Hewlett-Packard Co.'s 16.4 percent.

In the United States, Lenovo has a long way to go before becoming a household name like Dell, HP or Apple Computer Inc.. The company plans to keep the ThinkPad brand developed by IBM for its large business customers but eventually would like to sell computers under the Lenovo brand alone, Yang said.

''We wish our brand would be among the top levels of PC brands,'' Yang said. ''Certainly, we have a long way to go. Our brand recognition is still very weak, especially in the U.S.'' LENOVO ''TOTALLY CAPITALIST'' Yang also took issue with attempts by some critics in the U.S. to portray the company as a potential threat to national security.

Lenovo, whose stock is traded on the Hong Kong stock exchange, last month said it would welcome a U.S. investigation, if necessary, to quell security concerns related to a U.S. State Department order of more than 15,000 of its computers.

Lenovo's biggest shareholder is Legend Holdings Ltd., which was founded in 1984 with a $25,000 investment from the Chinese Academy of Sciences' Institute of Computing Technology.

The Chinese government's stake has prompted some members of a U.S. congressional commission to charge that China might use the Lenovo computers to gather State Department intelligence.

''This company is run totally by its founders and management,'' Yang said on Thursday. ''The government is never involved in our daily operations, in important decisions like strategy, nominations of CEOs or financial management.'' ''We are different from a state-owned enterprise,'' Yang said.

''It's a totally capitalist philosophy.'' REUTERS CS BD0909

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