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IBM Puts PC Business Up for Sale
valdean writes "When I was growing up (in the 80s), there were two kinds of computers that my friends (or, more specifically, our parents) had at home: Apple and the IBM-Compatible. IBM defined the PC at that time, and deserves a large share of credit for taking the PC out of the hobby shop and into the mainstream. Now it looks like IBM is getting out of the PC business altogether. CBS Marketwatch has another report."
The reason people buy Thinkpads are because they are IBM thinkpads. So, lets say Dell buys the business, we get "Dell Thinkpad"... Does that sould stupid to anyone other than me?
Nothing for you to see here, Please move along.
I guess I'll have to buy Toshiba instead.
I'd advise against it. I had a Toshiba laptop once and it broke down more often than all my other laptops combined. The powerconnector went, the floppy disk and the display. The one good thing about Toshiba is the exellent global service, they actually don't give you lip when you try to cache in on the international warranty and the techsupport isn't bad either. On the other hand, good as the service was, having the thing in the shop half the time sucked.
Only to idiots, are orders laws.
-- Henning von Tresckow
This is interesting only for the fact that it would allow IBM to further distance itself from Microsoft and Intel. There is no doubt in my mind the big-wigs at IBM are really annoyed their predecessors got punked by Redmond. If they're successful in selling the unit, it would be interesting to see if they would begin migrating their server product lines away from Microsoft as well. There is already much publicized talk about IBM corporate going from Microsoft OS's to linux, perhaps this is just a step away from license dependent products. It isn't as though IBM needs the revenue from the PC business.
The thing is, you can't licence quality like that, unless maybe it includes some means of requiring third party durability testing. I don't think it is that hard to make a solid notebook, the problem is that most notebooks aren't solid because it costs more to build them that way, and most people chose price over quality.
I have to say this stinks. IBM was one of the few PC makers that endeavored to build innovative, high-quality products (like the T42 I'm typing this on). The others (Dell, HP/Compaq to name a few) appear to be focusing on building cheap plastic boxes at the lowest possible price. I hope whoever buys the business doesn't forget that there is a high-end segment of the market that cares about more than just price. At least we still have Apple...
Oh, and "shit" is spelled "shit," without any dollar signs or ones.
Another one bites the dust
*please* IBM keep your Thinkpad business. These (and the Apple Powerbooks) are the best laptops on the market today, and well worth a premium price. I've owned 5 different Thinkpads over the years, from the 701C "Butterfly keyboard" model up through the T and X series. Every one of them still works perfectly.
I like ThinkPads very much: the TP600 has the best keyboard I have ever used on a portable machine. However, the longevity of my ThinkPads has not been as good:
- the CMOS battery died prematurely in the TP600; now it defaults to the external display on boot and must be reconfigured manually each time it is powered up
- the onboard NIC in the T20 appears to have died and taken part of the PCI bus with it. Three current Linux distributions (MDK10, Knoppix 3.5, RH Enterprise) hang at
I want to drag this out as long as possible. Bring me my protractor.
This announcement has implications for Hewlett Packard, as they spun off everything but the PC and server business. As the real innovation of the old company is now in Agilent, I can't see long term prospects for HP being favourable.
[Note to HP: Invent, not rebadge]
Actually, for a large company, the price difference is not great (perhaps $50). IBM discounts heavily for large - or influential - accounts.
Widely criticized? No, it's been widely noted that IBM's decision not to keep a tight grip on the architecture and the OS led to the adoption of standard technology, which in turn got us where we are.
It's a hypothetical exercise to ask whether they should have written their own OS and designed their own chips. It's sort of a retroactive attempt to kill the goose laying the golden industry. Sure, they could have done it, but no, it wouldn't have helped them, and certainly not us.
sigs, as if you care.
Is still my genuine IBM PS/2 keyboard. It stil has great feel and great clacky sound. And its heavy enough such that I could still bludgeon to death a rabid spammer and then keep on ircing into the night.
its still my one computing true love.
Is anything IBM compatible these days?
All I see is "Designed for Microsoft Windows XP"
Okay so the subject is semi-lame. BUT.... here's a cool what if. What if a company committed to the high-standards of the Thinkpad line snaggs that part of the business? People are willing to pay the Apple Tax for quality, would they be willing to pay the Thinkpad tax? I think maybe there's a future for the Thinkpad in a niche market just like the Apples.
What if it is just turtles all the way down?
I think you can have a bad experience with a laptop from any manufacturer - in the same way that even premium automakers still make the odd lemon. I've always had good experiences with Toshiba laptops, but the Dell ones that my work purchasing dept insists on buying? Yech.
The day 'they' moved base to China is the day everything got re-branded.
Look at the stuff in WalMart and you'll what I am talking about. The overall effective standard off living in America is actualy *down*. It has increased only for the folks at the top.
If you've ever touched an IBM ThinkPad - you'll notice how 'singular' that laptop feels. Even if you pick it up from one corner, the damn thing will not show any duress. Now try that with a Sony/Latitude/Inspiron/Acer (which comes close)/Toshiba (higher models come close but those are exponentially expensive).
Where's my free iPod!? Until then, I'll settle for a kiss...
My thinking exactly. Cut loose the standard now dictated by Microsoft anyway, and establish a new one around Power and Linux. IBM could define a new generation of personal computer that complements its server line better than Windows and still, hopefully, embraces open standards and put the world on a better interoperative (sic), *nix-based footing. Leaving Microsoft out in the cold would just be a (sweet) side bonus.
A Power/Linux offering would appear to be direct competition for Apple, but I suspect they'd retain (or strengthen) their consumer niche if the business world shifted toward Linux, especially on the Power architecture.
IBM is a SERVICES company that has the mindset of Hardware company. I used to work for Global Services in a senior technical role. Or skills at IT Architecture, problem solving, Systems Integration, etc. were always an open door for the Hardware guys to try to sell overpriced equipment. It p*ssed off the customers. When Sam Palisano ran Global Services (before he became CEO) he and Gerstner both stated the future of IBM was services and software. So they went out and bought PwC's IT services group for it's business base (and laid off the staff). The long term trend has been and will be pro-Service and definitely anti-hardware. IBM even laid off folks at the R&D Labs about a year ago, so even the patent and inventions for hardware are not as important as before. Sam's idea of the R&D guys is who cares if we can write IBM from single atoms, no one buys Atoms. Unless IBM can sell them Atom Services it has no place in this company. Get rid of it. Palisano was known as a "slash and burn" guy who if it wasn't making the revenue it was gone in a heartbeat. He was the guy who sold off the first generation IBM PC business back in the late 80's when he ran that group. Make the company money by getting rid of the "waste" was how he climbed up to CEO.
Don't get me wrong IBM makes some very good equipment top to bottom but the mainframe market (Z-Series) is stagnant at best, mid-range is flat (AS-400), servers (Unix/Linux) are still hot, but desktops and laptops are way too price sensitive for IBM to make money there. When Joe Customer can get almost TWO Dells for one high-end Thinkpad, 9 of 10 customers buy the Dell. IBM just can't compete in a market that is purely cost driven where the cheapest wins and quality is a distant second consideration. Laptops and desktops are a commodity these days. If IBM can get a few Billion out of the laptop biz and keep those losses off the books then they ARE doing the right thing business wise. They might even get some sort of Branding revenue from whoever buys the line and wants to keep the IBM name (and quality I hope) just with a lower price point. IBM did this very same thing 10 or so years ago with the DiskDrive group. They first outsourced the manufacturing then sold it all. That idea has worked pretty good! All told I think this is a GOOD business move by IBM (Wall St agreees, Stock is up) which might hurt some short term but will help free up cash for other things (Services, new Software) long term. I do kind of feel sorry to see the laptops go, and some folks will probably lose jobs but businesses cannot remain stagnant or even more folks might lose thier jobs.
If you think about it, IBM selling off their PC unit is good business- take a product that has razor thin margains and sell that capacity to someone else who has lower costs. Keep the cash and move upscale on what you want to continue to build.
The did with the Global Network (sold to ATT) and now they'll do it with PC's. At some point they'll spin off the high end stuff when its no longer needed.
Its the same argument you see with outsourcing today (or logic as they call it)-- keep spinning off lower-entry technology as you move up the chain.
I'm not saying its good or bad (or I agree), but just saying that I see their point in selling something that is totally a commodity to a manufactor who doesn't face the same cost structure.....
# nohup
Well, aside from the OS (win 98se), its quality!
Thats not to say that I didn't have to use the warranty; when I DROPPED the laptop and the 802.11b pcmcia card sticking out screwed up the pcmcia port, thats no-ones fault but mine. The rest of the laptop worked fine.
And yes- Toshiba support was great and FAST.
I've had it for 5 years and the only problem is the windows running on it.
In the future, I would want to not be isolated from my friends in the Space Station.
And I've got one that's six years old and works great.
We can judge by this anecdotal evidence that 50% of toshibas suck and 50% are great.
Also that you don't understand statistics.
Read jack phelps dot net
You'd be amazed at the number of people, particularly over 50, who'll only buy IBM PCs. I'm talking about people who'll still buy IBM even if they're $500 more than the exact same PC or laptop without the IBM badge.
Actually most of the 1st tier venders sub-contract their laptop manufacturing to firms like Twinhead, Quanta, Compal, Mitac, Arima, Inventec & Vecta in Taiwan & often these firms will sell exactly the same laptops out the backdoor with generic branding, & I wouldn't be surprised if IBM does sell their Thinkpads at significantly higher price than the equilivent generics off the same production lines (some 1st tiers sign exclusivity clauses on their designs & have had to sack their contractors & hired others because they were caught selling identical generics 'out the back door'), but I'm talking about a markup that not even attempting to be competitive on price.
Really in regards PCs IBM should not even be attempting to trade on price or marketshare & just scale back production of PCs till they only need to cover the IBM at any cost market & just make up on the lost economies of scale by having a markup of at least 50% (preferably 100%)
Afterall what's better business wise? Having a significant share of the market & huge economies of scale, but barelly breaking even; or having a business that's over 90% smaller in regards marketshare, but having a $500 markup on those PCs they do sell.
Look at Morgan, they make a bigger net total annual profit on just the dozen cars they sell a month than billion dollar companies like Volkswagon or Ford Europe that have huge turnovers & marketshare, but are losing huge amounts of money, billions annually. To me that makes Morgan a more successful business than Volkswagon or Ford Europe. Of course a paper loss might not be one in reality if all the management in those mega-manufacturing companies are paying huge salery increases & bonuses to the thousands of employees above the lowest management grades, & are covering expansion/takeover costs. In which case in a sense the official loss is just to minimise tax & to make sure shareholders don't get to rake out a cut dividend wise, but that's another story.
Anyway back on topic, IBM needs to have some sort of range of PCs for IBM's Enterprise sector anyway, so they may has well add some economies of scale that comes from selling extra on the retail side to the IBM at any cost brigade.
Mind you I have to admitt that the IBM at any cost brigade is of a generation that's already entering retirement & early death, but no doubt there's still up to 20 years of business supplying these types till they're all gone.
Is that why the Apple slogan is 'Think Different'?
There's one thing I've been saying for a long time.
IBM has never fundamentally understood the personal computer. Sure, they helped bring it to market...but the entire reason why Microsoft were originally able to get ahead of IBM with DOS was because at the time, IBM still had doubts that the PC was ever going to go anywhere. I remember when I installed OS/2 once...there were tons of communications protocols for connecting to *mainframes.* The only protocol for inter-PC communication that I saw just about was TCP/IP itself.
IBM were originally a mainframe company...that is what brought about their heyday...it's what they've been doing since the second world war...it's primarily what they know. In that sense, their length of history with mainframes was working against them...they were so used to mainframes being the answer, that as ESR might say, on a gut level they just didn't truly grok the concept of the PC.
This is still a sad day however, because they were instrumental to the contemporary PC's adoption...Even if most of the time it was probably in spite of themselves.
I can name several very large companies that use Notes exclusively. P&G comes to mind, as one example.
One Can Never Own Enough Musical Instruments...
The situation is more complex than that. Part of what made the IBM PC division the 'worst thing' for OS/2 was just the fact that the PC Division and OS/2 were both under the same corporate umbrulla. For Compaq to, say, ship a PC with OS/2 installed meant paying a substancial per-machine license fee to IBM, one of their direct competitors. This is completely counter-intuitive to the way to compete at that point in time in the PC business. It was much more attractive to pay a per-machine license to Microsoft, an entity that was NOT a direct competitor.
Few people acknowledge this reality. OS/2 being closely tied to a PC Vendor was bad for it's spread.
"What's the frequency Kenneth?"