The IBM ThinkPad: No. 1 Product, No. 3 Vendor

 
 
By Rob Enderle  |  Posted 2003-10-15
 
 
 

Reminding us a bit of the hit song in the "Chorus Line," IBM is a case study in contradictions. Its new T41 laptop is arguably the best business model from any vendor. However they are competing with Toshiba for third place in laptop sales and, with desktop hardware, they really arent considered to be in the same league with HP or Dell.

What makes the IBM T series so good? And why the is IBM PC company in deep trouble. Unlike the other vendors, IBM can argue it invented this class of computer; the TrackPoint pointing device is its own, and the jet-black, sharp-edged design is uniquely IBM as well. Only Apple has a more easily recognized product.

IBM was the first actively to seek customer and analyst input about future designs, a practice copied by most of the tier-one and some of the tier-two manufacturers, and this allowed the company to focus on satisfying customer needs while other companies took a more random approach to finding what was important.

Finally, in laptops, IBM wasnt afraid to try something new. While Apple recently lit its keyboard from underneath, IBM has had a keyboard light for years (a feature many IBM laptop owners dont even know they have). Recently, IBM announced a series of additional features that allows it to argue continued hardware leadership; the most interesting of these is a built-in accelerometer that can tell if the laptop has been dropped and will, in a fraction of a second, protect the hard drive from the shock of hitting the floor. IBM laptops are the only ones currently shipping using the industry-standard security subsystem approved by the Trusted Computing Group (TCG). Most of the vendors belong, but IBM is the most aggressive about using this technology.

Unfortunately, this is a mixed blessing. Like Toshiba, IBM has a unique software-application set on its laptops that should assist with wireless connections, backup, software migration and problem resolution. The good part is it provides a generic set of applications that can work across operating system versions and are clearly better than what came with Windows 98; the bad news is they can really screw up Windows XP.

IBM has a nasty tendency to repeat past mistakes and to lag on correcting current ones. This software is a case in point. Laptop software needs to be hardware-independent so it can scale to its potential, and it cant create conflicts with the operating system. The IBM software is very good, but the Altiris-based solution that HP and Dell use is good enough, and it is vendor-independent.

Consider Apple: Sticking to its own own OS platform caused the company to decline from over 20 percent of the market at its peak to under 2 percent today. Unique software just hasnt worked well for hardware vendors.

In his book, "Who Says Elephants Cant Dance? Inside IBMs Historic Turnaround," Louis Gerstner lists IBMs exit from the consumer market as one of his biggest mistakes. This mistake is what has put IBM in the No. 3 spot, and a distant No. 3 at that. In fact, the company could drop to No. 4 or No. 5 if the consumer market surges and additional consolidation occurs. Not having consumer products costs IBM economies of scale (lower volumes) and visibility (it isnt on retail shelves), and makes the company look like its slowly exiting the PC business. This situation isnt helped by IBM Corporate marketing, which is both incredibly well-done and focused in areas that have nothing to do with PCs (and in some cases suggests IBM is working to eliminate them). Thats a perception IBM strongly denies, but it sure isnt investing in PC technology to the same level as HP or Dell.

Another factor to consider: As the economy has improved, companies have started to re-examine Employee Purchase Programs (both subsidized and non-subsidized). The more consumer products a vendor has, the more interesting these programs are. And with volume discounts both applied to and accelerated by consumer product purchases, vendors like HP that have a very strong consumer line should hold the advantage going forward. (No wonder Dell is getting more aggressive with consumer electronics!)

In the end, the T-series remains, in my mind, the best business laptop on the market. But while I use the T40, what I want is the new Sony TR1; in the long term, sentiments like that will put IBMs PC company to the road test.

Rob Enderle is the principal analyst for the Enderle Group, a company specializing in emerging personal technology.

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