Sold! IBM Sells PC Business After Pioneering the Industry 23 Years Ago

IBM has announced that China's Lenovo Group Ltd. will buy and control IBM's PC making business for $1.25 Billion. IBM pioneered the PC business 23 years ago and leaves as it views profit margins too narrow to be worth pursuing any longer. Lenovo will take control of the IBM PC business in the 2nd Quarter of 2005.

IBMfeatured a breaking news story on their site Tuesday evening to announces their PC business acquisition by Lenovo

The key items of the deal between IBM and Lenovo include the following:

• Creates world's third-largest PC business with approximately US$12 billion annual revenue for 2003
• Global business with worldwide reach, powerful brand name, balanced product offerings and leading R&D capabilities
• Long-term strategic alliances between Lenovo and IBM in PC sales, service and financing worldwide
• Worldwide headquarters in New York; principal operations in Beijing and Raleigh, North Carolina
• Transaction of US$1.25 billion in cash, equity; total transaction consideration of approximately US$1.75 billion
• IBM to take 18.9 percent equity stake in Lenovo; transaction expected to be completed in second quarter 2005.

So what does this mean for current IBM customers?

According to IBM, the company hasbuilt its reputation on supporting its customers, and that will not change. In products, in support, in financing, or in quality.

According to IBM the ThinkPad line will maintain the "IBM ThinkPad" branding and the quality will not only be maintained after Lenovo takes control, but will also be improved-upon -- bold words for which only time will tell if they are true or not

The IBM ThinkPad and IBM ThinkCenter branding will continue to exist. It will not be changed to Lenovo ThinkPad or Lenovo ThinkCentre. The ThinkPad will still be serviced by the same service group and support organization as they are now, Lenovo will simply buy out the current employees from IBM and they will become Lenovo employees. All warranty services that Business Partners perform on behalf of IBM PCs will continue, so it is business as usual with service support for IBM products.

IBM itself will continue to offer a full range of IBM-branded products to its enterprise and small and medium business clients and in addition to this also offer award-winning products from Lenovo.

In summary, if you are a current IBM PC owner then you should not notice any changes whatsoever.

Down the road IBM claims that "the goal is to build on that experience. To combine the best of IBM and the best of Lenovo into an even higher standard." It is true that Lenovo is respected for its high-quality products in China, so we hope that the IBM ThinkPad line quality is maintained and innovations continue to occur.

IBM Press Release: IBM Announces Sale to Lenovo Group Ltd.

 

how about our customer IBM thinkpad service? Is our IBM thinkpad warranty going to expire?

 

Lenovo is renowned for quality... You obviously have never owned one. They look good on paper (Spec) but mechanically they are garbage. Good look IBM..

 

Abaxter,

I think you misread the press-release. Here is another report, among the several that I have read so far, that says that the Think lines will only live under IBM name for the maximum of 5 years, even though they really are Lenovo Think lines already. After that (or whenever Lenovo is ready), IBM Think lines are no more, it will just be Lenovo Think lines.

http://money.cnn.com/2004/12/07/news/international/lenovo_ibm.reut/index.htm

What you said was true for up to 5 years only, and only if you discount the fact that the relationship between Lenovo & IBM will be more like Asus & PortableOne, rather than Quanta & HP. The good news is IBM has a 20% share in the new Lenovo and the team behind IBM's success is also sold (it is not uncommon, however, to see an exodus of IBM employees in such a deal -- after all, they signed on to work for IBM, not Lenovo). The bad news, well, is always the simple question: how can Lenovo increase market share further without going "low-price, low-cost, & low-quality"? IBM can't pull it off, but can Lenovo make this miracle?

 

"The bad news, well, is always the simple question: how can Lenovo increase market share further without going "low-price, low-cost, & low-quality"? IBM can't pull it off, but can Lenovo make this miracle?"

Well, for starters, they could start off by redesigning it to look a little nicer. Business doesn't have to mean bland. Look at Apple, they can sell on style AND quality.

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You can sell style and quality, no doubt, but how big of a market is that? I don't think Apple has that big of a market share. In fact, I think Apple has a smaller global market share than Lenovo.[ ]

And style and business, well, the same thing. I know I am highly recommended against IBM by my wife because of style, but I am not a coporate customer. [ ] I don't think there are that many business people got turned away from IBM because of style.

Perhaps "Personal" in PC has doomed the IBM from the start, because business is nothing personal.[ )]

 

The only way for them to win is to hire all the employees with CHINA's wage. Build everything outta CHINA's factories to lower the costs of manufacturing. Leverage IBM's name for 5 years, and hoping for smooth transition afterwards.

So the quality will suffer. The service will suffer. But the price will come down, and more ppl will buy it and market share will increase.

Ppl will say that they don't build it like they used to, but for the price, they will take it...

Then it be business as usual, just ibm thinkpad no mo......