IBMs PC Unit Sale: Looking for Answers

 
 
By David Coursey  |  Posted 2004-12-08 Email Print this article Print
 
 
 
 
 
 
 

Opinion: IBM's sale of its PC division to Lenovo raises a lot of questions, most notably, what does it mean for customers, employees, the competition and the IBM brand name?

IBMs sale of its PC division to Lenovo may be a good deal for shareholders, but I dont see customers cheering. Click here to read more about IBMs sale of its PC division to Lenovo. In jettisoning the low-margin personal computer biz, IBM spruces up its balance sheet but also shows longtime customers they are as disposable as, well, a formerly mighty business unit.
Big Blue will own nearly 19 percent of Lenovo and about 10,000 IBMers will move to the Chinese company. Dont you just know theyre feeling good today? How many American IBM employees ever imagined theyd end up employed by a Chinese company—even one thats moving its headquarters to New York?
Interesting factoid: IBM says more than 40 percent of the Lenovo transfers already work in China, while less than 25 percent are in the United States, according to published reports. Lenovos new CEO will be the former head of the IBM PC group. Thats reassuring for as long as it lasts. But if history is a guide, at some point Lenovo will start chasing the IBM people off and economizing. If theyre not careful, the Chinese managers could wring the soul from their new acquisition.
Dell and HP can be expected to do everything possible to scare IBMs PC customers. It may, however, be hard for companies who rely on Chinese manufacturing to differentiate themselves. Well have to see how that works out. IBM will doubtless make the case that nothing significant is going to change and the PC business will operate as it had before the sale. I doubt thats entirely what will happen, but it could play out that way. We just have to what and see how that works out too. Is IBMs PC retreat good business? Click here to read more. Since the talks first became public, Ive received a number of messages from IBM PC customers, expressing their disbelief that they were being abandoned. Sure, China Inc. makes very nice computers, but customers liked the confidence that came with the IBM brand. And they didnt mind paying more to get reliability and features. The ThinkPad notebook line has always been considered a solid corporate purchase, especially as other portable PC vendors suffered their ups and downs. Sure, notebooks became commodities, but ThinkPad owners are second only to Macintosh users in their missionary zeal. Im sure there are people out there who dont like ThinkPads, Ive just never run into any of them. Next Page: What will happen to the IBM brand name?



 
 
 
 
One of technology's most recognized bylines, David Coursey is Special Correspondent for eWeek.com, where he writes a daily Blog (blog.ziffdavis.com/coursey) and twice-weekly column. He is also Editor/Publisher of the Technology Insights newsletter and President of DCC, Inc., a professional services and consulting firm.

Former Executive Editor of ZDNet AnchorDesk, Coursey has also been Executive Producer of a number of industry conferences, including DEMO, Showcase, and Digital Living Room. Coursey's columns have been quoted by both Bill Gates and Steve Jobs and he has appeared on ABC News Nightline, CNN, CBS News, and other broadcasts as an expert on computing and the Internet. He has also written for InfoWorld, USA Today, PC World, Computerworld, and a number of other publications. His Web site is www.coursey.com.
 
 
 
 
 
 
 

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