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IBM on Tuesday used the unveiling of several new PCs and services to tout itself as the only full-service computer maker, while mocking its rivals for focusing either too much on cost or being too consumed with merger activities.
Although Jon Judge, general manager of IBMs Personal Computing Division, didnt address his competitors by name during a conference call with reporters, his remarks were clearly aimed at Dell Computer Corp., Hewlett-Packard Co. and Compaq Computer Corp.
“Todays announcement is important because it signals how IBM will play and win in the PC space going forward,” Judge said. “The new products and services were launching today demonstrate that IBM is taking a dramatically different approach to the PC business than our competitors are.”
IBMs hard-sell pitch on PCs on Tuesday stands in contrast to its ore quiet approach over the last two years, during which time the Armonk, N.Y.-based company withdrew from the retail market and appeared to focus heavily on promoting its “big iron” servers and services.
Over that time, Big Blue has seen its share of the PC market, with Dell posting strong growth in the commercial market and HP experiencing growth in the consumer retail segment.
In response to a question about IBMs apparent lack of aggressiveness in the PC market, Judge argued that the computer maker pulled back in to focus on competing in select market segments to assure greater profitability.
“We are focused on specific segments that we chose to serve,” he said. “By making that decision, you clearly will give up market share.”
In a refreshment of its PC product line, IBM introduced three new NetVista desktops—a high-performance X series, mid-range M series and a low-priced A series. In addition, it released four Thinkpad notebooks—the A30, featuring integrated wireless capabilities, including 802.11b and Bluetooth, and embedded security subsystem, a low-cost notebook starting at $1,249, and the X22 and T23, with integrated wireless capabilities.
The company also launched a new set of services that it says will help reduce costs associated with managing large numbers of PCs.
Judge said that by leveraging IBMs technological developments, such as its security chip, as well as its extensive services offerings, the company is better positioned to compete in a rapidly evolving PC market.
“Price is clearly no longer the driving force behind corporate PC purchases, because price is no longer a feature, its a requirement. Its going to take a lot more than products that are just good enough and (an) efficient business model,” he said in an apparent reference to Dell.
The IBM executive also took a stab at HP and Compaq, which last month announced their intention to merge in a bid to form a company that can offer a broad range of product and service offerings, much like IBM.
In essence, Judge said, IBM has already achieved that goal while “these companies are spending most of their time today involved in merger-and-acquisition activities.”
The HP-Compaq merger comes as both companies and the PC industry struggle to weather a year-long slump in sales. While analysts have been largely critical of the proposed merger, most agree that companies such as IBM, with broad product lines and extensive service offerings, are in a better position to compete in the industry going forward.
“When business picks up, any old PC just wont do,” Judge said. “Vendors that choose to compete on price alone without innovation will run out of steam very soon.”