In fact, IBM should have gotten out of the PC industry a long time ago. Its been years since the company made memory, hard drives and Token Ring cardswhy did they stick it out with PCs? According to ex-CEO Lou Gerstner, its been "painful and costly for IBM." But he truly believes that the company could have competed. As he said in his 2002 memoirs, "If we had focused on the marketplace and done our homework, theres no reason the IBM PC business today would be looking up the leaderboard at Dell." Well that time has passed. The corporate desktop looks a lot like a terminal, circa 1985. Interchangeable parts are defined more by what they connect to rather than whats inside. In other words, its the services they run that are far more importantand theyll run just as well on a Dell.What other top PC manufacturers will be gone in 2007? Read David Courseys predictions here. So what will happen to IBMs computer division? If I bought it, Id immediately slash the desktop line and focus on notebooks. Id continue to drive qualityIBM still makes the best portables in the industry. Id look very carefully at WinBook. The scrappy direct notebook vendor sold over a billion dollars worth of mostly well-regarded portables last year. WinBooks parent, Micro Electronics, also owns the off- and online retailer Micro Center, which sells a wide array of computing hardware and software. And thats who I think will pony up the bucks for IBMs computer division. Sure, Chinas Lenovo group is a good alternative. But I think a domestic reseller of technology will ultimately win out. CompUSA, MicroWarehouse, Tiger Direct and other PC retailers now realize they need a house brand along with reselling products from others. My prediction: ThinkPad becomes a Best Buy brand division within a year. Check out eWEEK.coms for the latest news in desktop and notebook computing.
Most of the PC excitement is happening at home, where Dell, Gateway, HP and others are jockeying for a piece of the media server market. From where I sit, those legacy PC vendors have already lost. Those devices will look a lot more like TiVo or iPod than your standard PC. But IBM hasnt been credible at home since its failed PC JR, so thats no great loss.