Chinese PC Maker Looks to Buy IBM's PC Business

idril writes "According to The New York Times (free registration required), China's largest PC maker is reportedly in talks to buy IBM's PC business. Lenovo, formerly known as Legend, is the leading PC maker in Asia outside Japan. Lenovo sells primarily low cost PCs; acquiring IBM's business would help them raise their brand recognition and status among more affluent, brand-conscious consumers."

Comments

IBM's Rep at stake

[TFGeditor]

I can't imagine IBM allowing a foreign manufacturer to sell products with IBM's name/logo on it. Seems awfully risky to their rep.

Re:IBM's Rep at stake

[drinkypoo]

That's not what's likely to go on here - it's most likely they'll kick out a bunch of advertising that says they bought the division from IBM at the same time they start kicking out IBM-designed PCs. Of course, if the people who make [some] IBM PCs great (I'm mostly thinking of thinkpads here but IBM HAS made some pretty nice PCs now and then) decide they don't want to work for them, which is a highly likely scenario, then the quality will taper off sharply within a generation or two and they'll be back to being known as a manufacturer of crap - as Legend was.

Re:IBM's Rep at stake

[Anonymous Coward]

They wouldn't get the right to put "IBM" on the products but they might buy the right to the trademark "ThinkPad" so you would buy a "Lenovo ThinkPad".

Re:IBM's Rep at stake

[Amiga Trombone]

I can't imagine IBM allowing a foreign manufacturer to sell products with IBM's name/logo on it. Seems awfully risky to their rep.

I don't know that IBM selling out entirely is a foregone conclusion. There's an article by the Register that speculates what's being negotiated is more likely a joint venture than a buyout. Which makes sense. IBM would still be able to maintain control of the branding in that case.

Re:IBM's Rep at stake

[mobby_6kl]

Most probably they won't have an IBM logo on it. Loot at the harddrive division they sold a while ago, these disks are clearly Hitachi, so I assume the same would happen here.

Re:IBM's Rep at stake

[Anonymous Coward]

IBM has been outsourcing the manufacturing of the
Thinkpad laptops to a Tiawan company for years ...

Re:IBM's Rep at stake

[Anonymous Coward]

I dimly remember my first ever Thinkpad was made by Ricoh.

Re:IBM's Rep at stake

[Anonymous Coward]

In fact, the laptop I am typing this on, a T42 Thinkpad, says made in China. It was shipped from the manufacturing facility in Hong Kong. This move doesn't seem to be as much of a shift as the headline would suggest.

Re:IBM's Rep at stake

[mrm677]

Nearly all consumer electronics bearing the "General Electric" name and logo are manufactured and sold by Thomson Electronics of France.

Re:IBM's Rep at stake

[Anonymous Coward]

IBM gets a majority of their profits from software and services. IBM has a huge consulting business. They also own DB2 and Websphere and Rational. IBM is starting to focus on software and services instead of core computers. The current IBM management wants to focus on software and services. It's the consulting and services business that would be pushing this. Wall Street thinks this is a good idea and it's the equivalent of offshoring your wife to Asia. Maybe the IBM executives should sell their kids to China because this is a technology transfer. The IBM executives should employ their kids in the red light district of Thaipei because this is a technology transfer. Better maybe IBM should outsource their entire executive team starting with Sam Palmisano.

IBM is willing to sell the PC business because IBM has short sighted management. The PC business is a feeder to their large servers such as Unix servers and systems. Dell shows that with a good PC business you can make strong inroads into the enterprise. IBM could sell the IBM PC business to Dell and take a stake in Dell. There are lots of options for the PC business. The only reason to sell a business is because you are incompetent managerially or admitting you can't run it which is the case at IBM. IBM has had a history of letting Dell and Compaq and HP walk all the way over their PC business as is seen in the PS2 debacle. Customers should be asking if IBM isn't committed to PCs what is their commitment to Mainfraimes or Servers? Just what is IBM committed to? What would stop them from ditching them for high priced software? They could also outsource mainframe production.

Just look at the IBM Hard Drive business. IBM should have sold the Hard Drive division to Seagate or EMC and taken a shareholder stake in each. This would have strengthened IBMs position in Hard drives for the enterprise. Instead the logical (or stupid and dollar oriented bean counters) management at IBM sells the Hard Drive division to Hitachi. Hitachi is a competitor with IBM in large scale enterprise Hard Drives so why help your competitor? Hard Drives are also an important technical asset and to sell it to a foreign competitor is a really bad idea. This is capitulation. Hard Drives are an rapidly growing part of consumer electronics. The Japanese and Asian firms also have a big lead in consumer electronics so selling this even extends Asian leads in key computer technologies. IBM probably relies on Canon and Nikon for chip etching equipment unless they buy it from ASM Lithography of the Netherlands. The IBM management team needs to get taken to the nearest corn field and fired er make that shot by a firing squad.

IBM has pathetic marketing. If you run TV adds you should focus on consumer products not Corporate products the average American has no use for. Look at Websphere. Most Americans and CIOs are not going to buy Websphere from a TV add. CIOs don't decide to buy e-servers from TV commercials. Most American's watching TV are not software executives or CIOs. IBM runs blade and e-server ads toward people who don't have any concept of what they are or any purchasing power to buy them. IBM advertises 10,000 dollar blade products on TV. IBM could be focusing on what the PC division produces instead of enterprise products. I really have no clue what PCs IBM makes. Promoting the PC business would be to much cost for the bean counting and out of touch IBM executives.

Re:IBM's Rep at stake

[Bishop]

All commodity computers (such as laptops) are built in Asian factories. I would go so far to say that all laptops, regardless of brand name, are built in the same dozen factories or less. Some laptops are designed by the manufacturer and simply rebadged. Higher end laptops usually get more input from the brand name owner (e.g. IBM, Dell). Some laptops are essentially built in Asian, but are "assembled" in North America, or Europe, for PR reasons. Now some companies will say everything is built in "our factory." Understand that the manufacturers are more then happy to let a brand name claim that a manufacturer's factory is owned by the brand name. And with a little creative contracting it almost true.

Now before anyone points to Apple and claims that Apple designs everything, let's get something clear: Apple gets alot of help from the manufactureres. They would be foolish otherwise. There is a big difference between an excellent design, and a design that is cheap an easy to build.

Many big servers are still built in North America and Europe. This is partly because of the lower volume. The other reason because there is a perceptions that the North American and European workforce is better educated and more capable at performing testing. Durring the manufacturing process commodity computers and parts get very little testing. (Testing is time consumeing and expensive.) Mid range servers and up will get more testing. Testing varies from checking that all components are properly attached, to a full system integration and power up with regression tests. Due to the cost of some servers it is sometimes worth while to fix manufacturing errors. If a commodity computer fails a test it is usually tossed.

Some commodity components will also be manufactured in North America early in the life cycle. For example my ATI card was built in North America while they worked out the bugs.

Re:IBM's Rep at stake

[Anonymous Coward]

> these disks are clearly Hitachi

Unless they are being sold to a True Blue IBM shop, in which case IBM sticks their name on them. IBM rents out their name for for a lot of junk - Printers, Mice, etc. They'll do it for PCs too.

Re:IBM's Rep at stake

[Anonymous Coward]

> The PC business is a feeder to their large servers such as Unix servers and systems.

For Dell and HP, yes, but not for IBM. Their PCs are junk and are basically only bought by people who already have IBM backends. I doubt IBM Sales spends any effort on PC only accounts.

Re:IBM's Rep at stake

[Zandall]

Do you really believe IBM and Dell produce their own notebooks? What ingenuity! They already allow a foreign manufacturer to produce their notebooks with their logos. Notebooks from IBM and Dell are mostly produced in China or Taiwan by other companies.

The problem here is the company that wants to aquire the IBM desktop computers company. They're not known by the quality of their product, if you understand me.

Re:IBM's Rep at stake

[urbaneassault]

Since the mid-90's, and especially since 2000, IBM has already outsorced all but the design on their desktop machines and laptops. The manufacture was moved from Austin to RTP, and then from RTP out to OEM's and OED's.
Since 2000, most of the original design has been done by the OED's.
This isn't that large of a transition, and unfortunatly for ex-IBMers or friends and family of, we've seen this coming since 1992.
If IBM's rep will be hurt by this, it would have been hurt a long time back.

Re:IBM's Rep at stake

[plasticsquirrel]

They very well may not market them using the IBM name and logo, but rather simply market them as IBM's desktop solution. After all, IBM did scrapped its NetVista thin client line and started selling thin clients from Neoware. It's been done before.

I wonder, since the only place left for Intel chips at IBM will likely be in low-end servers, will IBM create a low-end PowerPC chip to compete with Wintel at some point?

Re:IBM's Rep at stake

[dan14807]

I can't imagine IBM allowing a foreign manufacturer to sell products with IBM's name/logo on it. Seems awfully risky to their rep.

You're kidding, right? I bet most of the stuff they sell is already manufactured elsewhere. Manufacturing was outsourced a long time ago.

Re:IBM's Rep at stake

[ArcticCelt]

With the dollar dropping like a rock I was expecting Europeans to start buying American companies but the scariest scenario will be if the China government starts buying USA piece by piece.

Re:IBM's Rep at stake

[TarrVetus]

Actually, while the value of the Chinese yen to the American Dollar has been at the same rate for months, the Yuan's value compared to the Japanese Yen has started to climb, approaching even exchange. This means much better profits for Chinese companies in Japan.

Also, the ASEAN is preparing to admit China, leading to the world's largest free trade bloc. They'll have improved access to markets in China, Japan, South Korea, India, Australia and New Zealand. The Chinese know that business is about to improve in China as well as the entire East.

Re:IBM's Rep at stake

[10am-bedtime]

china doesn't need to buy U.S. companies when it can buy the U.S. government (nakedly, in the form of debt, and more covertly, in the form of poltical contributions).

of course, you could say that (top) U.S. companies and the U.S. government are almost indistinguishable by now, and we'd both be right...

Re:IBM's Rep at stake

[Anonymous Coward]

China's currency does not float. It is pegged to the dollar. If they would allow the Yuan to float it would be appreciating at this time. This would make Chinese made products more expensive and less competitively priced. Don't expect the Yuan to be freely traded anytime soon.

ibm

[Anonymous Coward]

They won't completely sell it to china. There is no way they will do it without fpirst making sure they have some kind of financial stake in the chinese company.

Brand Recognition?

[u-238]

Won't take for the word to get out that they've been eaten by a Chinese megacorp. And if they focus more on 'name recognition' than the quality of their computers, it will take even less time to turn this effort of theirs to prove useless.

Re:Brand Recognition?

[CableModemSniper]

They aren't getting eaten by a chinese megacorp. Their desktop pc's that sit on peoples desks department might be eaten by a chinese megacorp.

I hope not

[mordors9]

IBM has always produced a quality product and had a pretty good reputation, especially their laptops. I can't imagine they would want to tarnish that image by selling to a low cost budget type PC company.

Re:I hope not

[Anonymous Coward]

I haven't tried their ThinkPads, but their desktops (at least in 1999) sucked balls!

Re:I hope not

[roror]

IBM laptops are made in china anyways. What difference does it make? I'd imagine the company which buys ibm pc division would try to make the most of it by retaining the quality of the laptop so that it can sell them in the same potential market. Otherwise it kinda defeats the whole purpose of buying the PC division.

Re:I hope not

[penguinbrat]

I would be sad to see in a few years that a 5 year old ThinkPad would be worth more than a brand new one...

Re:I hope not

[rubyfreak]

Honestly, I think IBM's desktop PC segment has grown more or less pathetic over the last few years. Old hardware (took them forever to stop using TNT2 cards), ridiculous prices and embarrasingly low quality. Even the chassis, which once was one of the most robust (and heavy!) ones, are now made of weak plastics, and overall I get the feeling that IBM only keeps their PC section alive purely out of habit. Selling their PC section to some low-cost manufacturer with a genuine interest of making it profitable would only make things better... or at least not worse than their present state :)

But their laptops are a whole different thing... i love them as much as i hate the desktops :)

Re:I hope not

[phalse phace]

....a 5 year old ThinkPad would be worth more than a brand new one.....

And that would be a bad thing?

Re:I hope not

[Anonymous Coward]

As if their laptop is not already designed and made in East Asia? Ever heard of ODMs?

Re:I hope not

[Anonymous Coward]

Lenovo make excellent computers today.
Their home market is China - 1000 million citizens.
In the future Lenovo will be bigger than DELL.
There is nothing wrong with selling out to Lenovo.

Re:I hope not

[Anonymous Coward]

"Worth more" as in the brand new one would be of lower quality, or...?

If the new ones are cheaper but of comparable quality, then the price of old ones will just go down faster. You are aware that computers are already one of the fastest depreciating products around?

No reg link

[Anonymous Coward]

http://www.nytimes.com/2004/12/04/business/worldbu siness/04asia.html?ex=1259816400&en=306e8426c19779 57&ei=5090&partner=rssuserland

I am such a karma whore. O'wait, I dont even have a slashdot account. O'well.

Enjoy.

Re:No reg link

[Anonymous Coward]

For the lazy

Re:No reg link

[Anonymous Coward]

Linkified!

Re:No reg link

[Anonymous Coward]

made me laugh, thanks:)

Trouble with a Capital "T"

[qw(name)]

If this happens it can only spell trouble for America's economy. These are the kind of jobs and businesses that need to stay in America. This is out-sourcing to the extreme.

Re:Trouble with a Capital "T"

[Anonymous Coward]

If America and American workers were any good at it the business would have stayed put without any problems. Clearly the companies which are outsourcing and selling their business units to other countries do not feel that America and American workers are good value for money.

Re:Trouble with a Capital "T"

[hrvatska]

IBM already outsources the manufacture of it's PCs. Other companies manufacture them to IBM's spec. IBM does the distribution and marketing. I don't know whether they are currently manufactured in the US or Asia, or a combination of both.

Re:Trouble with a Capital "T"

[canuck57]

These are the kind of jobs and businesses that need to stay in America.

See:

http://www.thejournalnews.com/newsroom/010902/09ib m.html in America.

The fact of the mater is any company can't run a business in the red indefinitly. And the date of this article suggests IBM has been bleading profits into the PC operations for some time.

And the web never forgets...

Re:Trouble with a Capital "T"

[bstarrfield]

IBM is selling the proverbial noose that will strangle the West. Selling out our technological base to an entity owned partially by the Chinese government is a recipe for disaster. I know it sounds alarmist, but this is a recipe for long term catastrophe.

The US is becoming a third world country. IBM sells an entire division to China - now a Chinese firm becomes one of the top three world PC makers - and not just on cheap PCs, but near the top. Worse, IBM sells this firm its PC patents, manufacturing processes, engineering knowledge. Several thousand more Americans are out of work (either from being laid off from IBM or through further competition from Chinese firms), and our technological base erodes. Good thing we can export grain, leather products, and beef.

However, Wall Street will likely respond to IBM's sale with a rise in IBM's stock price; the Bush administration won't raise a fuss due to their unquestioning support for "free trade" and Red China; most people won't care as prices for PC's will continue to fall.

I wonder how the workers in "Lenovo" are treated. What hours do they work? Do they have health care? Do they have any freedoms? When you go to Wall-Mart and purchase that Chinese made PC - likely soon with the IBM label - think of the people who slaved over it.

Re:Trouble with a Capital "T"

[Waffle Iron]

Clearly the companies which are outsourcing and selling their business units to other countries do not feel that America and American workers are good value for money.

It would appear that the only workers that are a "good value for the money" are the ones who are willing to work under conditions that would make Charles Dickens cringe.

Re:Trouble with a Capital "T"

[andy1307]

Selling out our technological base

A lot of PCs and laptops are already assembled in Taiwan and China. Most of the parts in my PC were made in Asia. How is this a selling out of our technological base?

Re:Trouble with a Capital "T"

[bstarrfield]

Specific to this case, selling both the patents that IBM holds for PC manufacturing and selling IBM's legitamacy to an external agency.

And, to put it damn bluntly, all the parts in your PC (and my Mac laptop) made in Asia do sell out our technological base. But booyah, we've saved $100 bucks! What the hell is to stop these firms in Asia from realizing that hey, why make your machines for Dell or Apple when you can get the profit yourselves? Hey, even better, you can call it an IBM?!/p>

We transfer technology paid for by the US government (research, infrastructure) and US consumers (far higher prices, our taxes that pay for research and infrastructure) over to foreign countries - all so the wonderful benefits of "free trade" make everyone richer. Yet free trade means nothing more than cheaper labor and looser environmental standards, never noticing that we're undermining our own way of life.

Re:Trouble with a Capital "T"

[bromodrosis]

Careful, your tin hat is about to fall off.

Re:Trouble with a Capital "T"

[Anonymous Coward]

What technological base?

I don't think the US has a technological base anymore.

Actually a majority of the Laptops are made in China and Taiwan. Desktop PCs are still being assembled in the US. IBM outsources some PC production to Sanmina-SCI. Dell assembles a large portion of there desktop PCs in the US even if the laptops are made in Taiwan.

Re:Trouble with a Capital "T"

[bstarrfield]

So what if it does :) ? Frankly, I'm surprised that /. members have such a laissez-faire attitude in regards to outsourcing, technology transfer, and general free-trade issues.

/. readers, generally, work in fields which are easily affected by free trade. Wonder why your salary has been the same for four years? Wonder why your friends are unemployed? Wonder why you can't buy hardly anything made in the U.S.? You have to pay attention tow what's going on in the economy, not just what's happening in the world of anime. And economics is more than one's own financial picture...

Go ahead, zap me karma wise.

Re:Trouble with a Capital "T"

[Anonymous Coward]

Free trade raises the standard of living. Instead of buying $2000 PCs made in the USA, as in the past, you can buy the same thing for $350 made in China.

There's no reason to overpay Americans to do the same job that someone else is willing to do much cheaper.

Re:Trouble with a Capital "T"

[qw(name)]

Ha! I've been rated a troll! That's too funny. Someone obviously doesn't know that definition of a troll.

Re:Trouble with a Capital "T"

[qw(name)]

I think you've touched on a very important point. Most shareholders today don't care about the woking conditions of the employees. That's what OSHA is for, right? Well, what if that company only does the marketing for a product that is made oversees, which is NOT regulated by OSHA?

The bottom line is all too often blind to real life issues.

Re:Trouble with a Capital "T"

[qw(name)]

Go ahead, zap me karma wise.

In order to do that, you have to start a discussion about how keeping jobs in America is important! ;-)

Re:Trouble with a Capital "T"

[abkaiser]

Aren't all IBM servers and PCs designed, built and tested in Rochester, MN, USA?

Re:Trouble with a Capital "T"

[Anonymous Coward]

Congratulations, you've got the point. As we're often told by Slashdot posters, Companies exist to make profit. "Being nice" doesn't usually help you make money, so it isn't part of the equation. So why should these American companies, which after all are only trying to make as much money as possible, give two shits about the workers they're laying off or the working conditions of the new workers they're hiring?

Welcome to the Global Market. Enjoy your stay.

Re:Trouble with a Capital "T"

[gl4ss]

well. there's a limit on what's sensible and what's not.

btw, would you rather pay 10x the prices on consumer electronics?

Re:Trouble with a Capital "T"

[Anonymous Coward]

good troll man...

Re:Trouble with a Capital "T"

[evilviper]

A lot of PCs and laptops are already assembled in Taiwan and China. Most of the parts in my PC were made in Asia. How is this a selling out of our technological base?

Because the research, the design, etc., ARE done in the USA, which is a big chunk of the money, and jobs.

Same thing goes for Intel, AMD, etc., while they may have much of their stuff made over-seas, that's all the low-margin stuff, while the high margin stuff is done in the USA.

Re:Trouble with a Capital "T"

[KarmaMB84]

That is unrealistic. It's more likel they'll get a huge reduction in cost to produce and only cut the price by enough to undercut the competition that hasn't outsourced yet. The whole point of outsourcing is to better compete and get higher profits. Why would anyone dump all their profits by cutting the price anymore than necessary?

Re:Trouble with a Capital "T"

[TheGavster]

Yeah, those worker's rights sure are a barrier to efficiency.

Re:Trouble with a Capital "T"

[Anonymous Coward]

all so the wonderful benefits of "free trade" make everyone richer Unless you live in sub-saharan Africa (not including South Africa) or parts of middle america. But that's a whole diffrent can of worms...

Re:Trouble with a Capital "T"

[Anonymous Coward]

Ha, google for ODM and see what you get. The T laptops from IBM is no exception.

Re:Trouble with a Capital "T"

[tho 1234]

Well, don't blame the executives at IBM and others who make these deals- they're obligated by law to maximize shareholder value, not to look after the economy or the country's viability. In fact, they would open themselves up to class action lawsuits if they made business decisions based on "mantaining the US technological base" or any other reason not related to the botom line.

No, that role entrusted to the government, and the vast majority of the population only looks at "moral issues" or "gun rights" or taxation or any number of special intersests when choosing their leaders.

THe bottom line is that the US is consuming far more than it is producing, which means it needs to constantly borrow money/sell off its assets to sustain this lifestyle. The US is entirely dependent on the central banks of Japan, China, and Saudi Arabia to buy up their debt in order to finance this unsustainable lifestyle-Right now they are mostly buying up US debt, but with their enormous wealth and the US's poor fiscal policy, they are turning to buying up morgages and US companies.
This is just the begining of the trend, as US treasury bonds become less attractive, they will likely use their money to take over US companies instead.

So unless the US somehow finds a way to change its massive current-accounts deficit, there can only be two possible results- Either the counties continue to invest, leading to widescale foreign ownership of everything in the country, or those countries pull their money from the US market, leading to total economic colapse.

here's an interesting article from the same issue of nyt:
http://www.nytimes.com/2004/12/04/business/w orldbu siness/04banker.html

Re:Trouble with a Capital "T"

[tedric]

Well, on the backside of my T40p it says "Manufactured for IBM Corporation Armonk, New York, USA. Made in China" already. And this is not a modell I bought at a trip to the future and brought it back to present in a time machine.

The USA is not becoming a third world country, it's more like the former second and third world countries are finally beginning to catch up. And this can only be a good thing for working conditions over there. Isn't that what development aid is for?

And now that these countries start to play on the global market, the "old economies" and its citizens are complaining "their" technology would be sold out. How pathetic!

Stop being lazy, face the changing conditions on the global market, prepare yourself and also look at the great opportunities of it. As a US citizen you should be the last one complaining about knowledge transfer, because 1 out of 2 of your leading engineers and scientists are not of American origin.

On this point you are right. These scientists go to the US because of better working conditions, more money, but health care? I doubt it. Freedoms? The US government has been cutting them for quite a few years and I don't see a change of this trend. But nobody forces you to buy products produced by kids for 5 cents/hour. And nobody stops you showing evidence that this happens.

It can be a good thing seeing western companies investing in the Chinese market or selling divisions to Chinese companies, if the deal includes that the working conditions over there have to meet certain standards.

Re:Trouble with a Capital "T"

[tj13009]

Does anyone know how many employees there are in IBM's PC division? Also, how many employees the sale for this business will effect in the US and international?

Brand Name

[amigoro]

From TFA: To what extent, and for how long, Lenovo or another buyer of I.B.M.'s PC business would be able to make use of the I.B.M. name would be a crucial question in any negotiations.

This is going to be interesting. It wasn't long ago that all PCs were 'IBM Compatible'. Thus the brand name IBM has tremendous value. However, once IBM jettisons the PC unit, and a new company takes over it, they will surely want to hang on to the Brand name.

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Re:Brand Name

[Donny Smith]

>However, once IBM jettisons the PC unit, and a new company takes over it, they will surely want to hang on to the Brand name.

There's no need to keep the brand name.

They just need the ThinkPad trademark like Acer kept TI's product line it acquired in 90's (what was it - Extensa or something? Yes, it is Extensa - http://global.acer.com/about/news.asp?id=166)

And then they can make up some more Think names (ThinkDesk for PCs, ThinkPod for portable music players and so on and so on).

PC's will be the toy

[WhatsAProGingrass]

PC's will be like the toys at the dollar store some day. you look on the back and it says "Made in China" and it cost only a few bucks.

Re:PC's will be the toy

[konekoniku]

Isn't that a good thing?

Re:PC's will be the toy

[TO11MTM]

.... I could be wrong, but I'm pretty sure much of Hon-Hai (FoxConn) has a good deal of manufacturing in China. Guess who Dell uses for many of their mainboards and cases. :)

Brand Name?

[BeerCat]

While another firm may buy the PC business off IBM, unless the deal is pretty amazing, then they won't be able to sell them as "IBM", whuch is what some customers are looking for (not quite the "nobody ever got fired for buying IBM", but more a recognition that they still tended to be higher build quality than the no-name brands, and hence were worth the extra expense).

However, they will presumably acquire the IBM build quality, so the trick is to be able to market the "we use the bits from the people who brought you the PC", and hope that customers adopt them.

Redundant

[Anonymous Coward]

What happened? No one read yesterday's article?

IBM PC: Only $360

[amigoro]

From the TFA: Based in Beijing and listed on the Hong Kong Stock Exchange, Lenovo has made its mark by producing a line of low-cost PC's, some selling here in China for as little as $360.

Is IBM about to become the poor man's PC?

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RTFM

[Safety Cap]

The margins on PCs are so low that Big Blue doesn't see any future in it. The cost of designing a new line causes that margin to shrink even more.

Part of IBM is smart; they're getting out of the hardware business and morphing into a service provider, where they can make big $$$. The stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box.

I guess if you're stuck with your Cobol program (Do you even have the source? No?), then you can take it like a man.

Re:RTFM

[AKnightCowboy]

RTFA yourself. They're not getting out of the server business, they're just rumored to be abandoning the DESKTOP market. They'll still make their Bladecenter and expensive PC server line (that runs Linux perfectly fine BTW).

I don't think it'll happen though.. they're in too many service contracts and having a hardware division in house makes much more sense than trying to procur another vendor's equipment and supporting it while maintaining their level of service. Think of all the government and business contracts that outsource to IBM who in turn provides the hardware, software, and people to make their business work. IBM would be essentially saying "well, we're going to buy generic white box PCs from China instead of supplying our quality systems from now on." Pooof, they'd lose all their federal government contracts overnight as they find someone that supports HP or Dell.

Re:RTFM

[Ed Avis]

So does this mean that IBM is selling off the crappy clonebuilder business - you know, the people who refused to sell any machine with OS/2? (variously marketed as Aptiva, PS/1 and other names) If so, good riddance. They'll be keeping the true-blue PC business, the group that used to make PS/2s and before that the original PC, PC-XT and PC-AT. At least that is my understanding.

Re:RTFM

[gwernol]

Part of IBM is smart...the stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400... that is comparable to a $5k HP Linux box."

I know what you're actually saying, but: if you're IBM and you're selling a $5k machine for $200k and can find 700,000 people a year who will buy it, that sounds pretty damn smart to me.

Re:RTFM

[ravenwing_np]

IBM would be essentially saying "well, we're going to buy generic white box PCs from China instead of supplying our quality systems from now on."

I just looked on the bottom of my Thinkpad. It sings to me these words: "Manufactured for IBM Corperation; Armonk New York, USA; Made In China". Where was that point you were making? I can't seem to find it.

Re:RTFM

[IntlHarvester]

The stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box.

Traditionally that "stupid part" is where IBM made all of it's money. (Although the Stupids are the customers, not IBM.)

My guess is that a huge chunk of IBM's Services revenue actually comes from servicing their Mainframe/Mini platforms, moreso than from $5K Linux boxes. So, its sort of an accounting trick -- take traditional proprietary platform revenue and make it sound like new services revenue to wall street. (DEC used to do the same thing.)

So, you can't really kill the golden gooses -- get rid of the AS/400, and the Services side is going to plummet (See DEC under Compaq management.)

Re:RTFM

[Anonymous Coward]

The distinction disappeared long ago -- there's no difference between an IBM and a Dell anymore except in laptops, and those are being sold.

Re:RTFM

[Donny Smith]

>I just looked on the bottom of my Thinkpad. It sings to me these words: "Manufactured for IBM Corperation; Armonk New York, USA; Made In China". Where was that point you were making? I can't seem to find it.

1. The point, as it says in the guy's post, is that Legend makes crappy products so Legend ThinkPads would crap out in a year or two.
2. China is a country, not a division of Legend Inc. or something like that.
3. I am quite certain that low-end (if not all) IBM ThinkPad models are manufactured by LG or Taiwanese companies; the fact that assembly is done in China is no big deal as long as the guys who manage it aren't clueless.

Re:RTFM

[the_mrshiny]

The margins on PCs are so low that Big Blue doesn't see any future in it. The cost of designing a new line causes that margin to shrink even more. Part of IBM is smart; they're getting out of the hardware business and morphing into a service provider, where they can make big $$$. The stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box. I guess if you're stuck with your Cobol program (Do you even have the source? No?), then you can take it like a man.

I think you are missing the value proposition of the iSeries. IBM is unifying it's hardware behind servers. Dsktops and laptops don't fit. While the acquistion cost of an iSeries is more than some comparable platforms, its total cost of ownership is much less. But more than that, that $200k machine can probably replace a farm of other servers. It can be partioned into Linux, i5/OS (which is probably the most object oriented OS ever and includes an integrated database), AIX and even disk hosting for Windows. It brings to all these the ability to move resources dynamically between partitions, and even to temporarily request additional CPU. It has incredibly easy to use backup and recovery, and at least on the i5 side, undefeatable security and invulnerability to viruses (similar to zSeries). Further, the underlying arcitecure can be completely changed without affecting applications (AS/400 went from 48 to 64 bit back in the early 90's without a single recompile, for example). What IBM id driving towards is clear. They will sell solutions and a box to go with them. One box - no matter what your need. One box that can run whatever your solution needs. It's a whole new model of computing. Hopefully, they'll market it better than OS/2!

Re:RTFM

[Blakey Rat]

Heh. What they miss is that the AS/400 runs its own operating system with its own applications, most of them custom-built by each business.

No, it's going nowhere soon. The migration costs are simply too high, much higher than the markup on the hardware.

Re:RTFM

[Anonymous Coward]

Not to start a iSeries vs. Unix thread, but IBM's new Power5-based iSeries uses 90% of the same components as their pSeries (AIX platform). Costs have gone down alot more than you think.

I'm not an iSeries user, but there's a reason why banks, hospitals, and other critical-uptime facilities use them. They don't go down. Oh, and the Power5 iSeries can, of course, run Linux (via the Power5 kernel) natively.

Re:RTFM

[Anonymous Coward]

"still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box."

That's an eServer iSeries, thank you very much. :-)
http://www-1.ibm.com/servers/eserver/iseries/

Keep in mind that an iSeries (AS/400) isn't like a PC, it's designed from the ground up with very tight, mainframe-like OS and hardware integration as well as funky things like logical partitioning into multiple virtual machines.

Security's very strong, the operating system has a built-in form of DB2 to handle user information, file system functions, etc.

And you can also put expansion cards into these systems where the cards are actually full-fledged PCs with their own Intel CPUs and memory, running Windows.

Let's see you do that with any "HP Linux box", costing $5k or otherwise.

Re:RTFM

[timeOday]

I guess you are saying all Chinese-made laptops are the same. I don't believe it. I pay more for Thinkpads because I've had such good luck with them. I still have a 233 Mhz thinkpad that sees daily use, because the screen and keyboard are great. The T40 I'm using right now came with a 3 year warranty, not all companies will do that. I'll be sad if Thinkpads go down the tubes.

Re:Yay

[Anonymous Coward]

Try this.

Correction

[BJH]

...acquiring IBM's business would help them raise their brand recognition and status among more affluent, brand-conscious consumers.

That should read:

"...acquiring IBM's business would only cause IBM to lose brand recognition and status among more affluent, brand-conscious consumers."

Come on - people buy Thinkpads because they want a quality product, not an El Cheapo hunk of junk.

Re:Correction

[Anonymous Coward]

But IBM won't be selling Thinkpads anymore. Why would they care if people stop buying them?

Improving Thinkpad security...

[shaneh0]

Thinkpads are known for cool security devices but I think the chineese could takes this to a whole new level.

Let's face it: The Chineese have a huge lead in fingercuff technology. American fingercuffs aren't even close! If they leverage their cuff experience in the nextgen Thinkpad they might just have the 'next big thing' on their hands.

I heard EA has already pre-ordered!

More Issues:Worker's Rights &Environment at Le

[Anonymous Coward]

The key concern in this sale is worker's rights and the environment at the new owner, Lenovo. Being a Chinese company, its management will brutalize its workers and will pollute the environment, creating a hazard for all Americans. In a study of major computer companies by the Silicon Valley Toxics Coalition, all the Korean and Chinese (including Taiwanese and Hong Kong) companies failed to meet even minimal standards for protecting the environment.

A side issue is the sale of sensitive technology to Lenovo, which may have connections to the Chinese military.

In my opinion, IBM should sell its operations to a European company or a Japanese company. For the latter, I suggest Toshiba. It currently sells laptops that use a finger mouse just like the one in IBM's current notebooks. For the former, I suggest some Eastern European company. Eastern Europe could use the work. Also, Poland currently has many personal computer manufacturers.

IBM may receive a small-ish price from an Eastern European company, but there are larger issues here. IBM management should ponder its corporate social responsibility (CSR) and help to expand Western culture. Unlike the Chinese, the Eastern Europeans are certainly committed to Western values.

End of an era

[IO ERROR]

IBM getting out of the PC business is a sad day for all of us. They commoditized the PC and made it possible for all of us to have cheap gaming and porn platforms right in our living rooms and bedrooms. Not to mention they built some pretty good computers. I still love my ThinkPad despite its occasional ACPI-related problems. I don't think "Lenovo" is going to be quite the same...

Re:End of an era

[Anonymous Coward]

But didn't they commoditize the PC only because they were facing those antitrust suits from the US government? The original IBM PCs were still quite expensive. Had it not been for the clones (which IBM didn't like and didn't sanction), I doubt the gaming and porn platforms we enjoy today would be quite so cheap and ubiquitous. So it's probably the government you should thank for commoditizing the market, rather than Big Blue.

Re:End of an era

[Jeff DeMaagd]

IBM didn't directly commoditize PCs. They were used as the standard by other makers and the public to make commodity PCs.

Re:End of an era

[int69h]

If anyone made the PC a commodity, it was Compaq for reverse-engineering IBM's BIOS.

Re:End of an era

[IntlHarvester]

Yes -- Commodity PCs existed before IBM based on the old semi-standardized 8080, CP/M, and S/100 technology where PCs were almost, but not quite compatible with each other.

The IBM Standard allowed things like disk drives, video cards, and BIOS details to be interoperable, so you could actually take a disk from one PC and use it on a PC from a different vendor. This probably would have happened anyway in the early 80s with or without IBM.

What IBM did do is licence all of this technology pretty cheaply (~$5/PC) to their competitors, but apparently that was only due to anti-trust restrictions.

Re:End of an era

[2nd Post!]

I thought it was Compaq that commoditized the PC, but IBM that made commoditization possible?

IBM is INTERNATIONAL

[Doc Ruby]

Why not? IBM's products are manufactured almost exclusively, with just IBM's name/logo on it. International Business Machines can be taken at face value. Imagine an industrial China turning the world into its commercial empire, the way America did to England.

Re:IBM is international

[Anonymous Coward]

IBM is still headquarted in the US whether it has international in its name or not. IBM still has to answer for it's domestic workers just as much as to foreign companies. IBM also has to take into consideration DOD contracts and defense contracts that would frown on having foreign suppliers for key products. When Hitachi bought IBMs HD division they offshored the production to China.

International isn't synonymous with outsourcing. You can be international and not have to outsource all your manufacturing and technology.

Re:IBM is INTERNATIONAL

[Doc Ruby]

"Smacks of contempt" over the Opium War (a no doubt unintentional/unnoticed pun) was the only worthwhile part of your post, Anonymous myopic Coward. Starting with "IBM is stupid"... how many ways can that be wrong? Missing from your foolish statements is "the US won't let China take over the world". Right, Korea and Japan will stand in the way of the nuclear power that owns the US government debt, the global factory capacity, 2B people, and an unparalleled history of empire.

Maybe you also missed the part of global economics where practically all the products consumed in England were made in the USA, for decades. You even have the obtusity to say that a Chinese company (by definition, part of the Communist mafia government) buying IBM's PC business has "nothing to do with commercial empires". The only accurate line in your entire post is "I think not". When you say that, I can't help but agree.

Re:IBM is INTERNATIONAL

[kantai]

Sorry if this sounds blunt, but Japan did quite a bit of damage to the Chinese in the 1930's.

Re:IBM is INTERNATIONAL

[Doc Ruby]

75 years ago. Before the ruthless Communist mob took over, industrialized, and got nuclear weapons, owned the US federal debt, had the global manufacturing economy by the balls, formed the sole hope of capitalist marketers around the world, etc. Back when Japan itself had a military that took over half the world, rather than a constitution outlawing war, and a military and culture to match. The tables are entirely turned. This might sound blunt, but we're not talking about the Mongol horde, either.

Re:IBM is INTERNATIONAL

[Anonymous Coward]

Couldn't really understand or makes sense of what you said. So I hired a translator

The translation is "crap." "What a bunch of crap."

England never consumed or made all of it's products from the US. They bought tea from India and their colonial empire. England also made Rolls Royce engines and cars and Jaguars in England. England made some of the first iron clads and started the industrial revolution. So the English would take offence at this.

The English translator would say "rubbish."

You must have some issues with the US. Especially considering the US bailed the Chinese out in WWII. Didn't say anything about the US. Just said that China will never dominate the world because Japan and Korea are economically able to compete with them. In Asia the rest of the world has three strong economies as checks and balances.

Re:IBM is INTERNATIONAL

[Anonymous Coward]

By the sound of it your advocating business as war. Which is hypocritical to your tagline. "Make install, not war."

Re:IBM is INTERNATIONAL

[Anonymous Coward]

And as a result, China has now developed the largest army in the world. Your point?

Re:IBM is INTERNATIONAL

[Anonymous Coward]

And if the Japanese hadn't started WWII they would still be masters of China and Asia. So how about that for a historical What if.

Re:IBM is INTERNATIONAL

[Doc Ruby]

After WWII, America flooded a broken world with our products, completing its momentum in hosting the world's manufacturing. England, among other countries, found every product it consumed stamped "Made in USA". China will do the same, with the complicity of American corporate owners. Once they've cut out our middlemen in selling their factories' products to the world, controlling our industrial/trade policy by controlling our debt payment terms, we'll be just another farm to feed their people.

I have "some issues with the US". I'm American; it's my responsibility to "have issues with the US". I have issues with Anonymous Cowards, too, who post nonsense about Japan and Korea erecting a flimsy barrier to a China that can threaten the US industrial hegemony. I'm sure you're quoting from some "Conservative" talking point, justifying the rearmament of Japan and Korea to get a bigger cut of their economies poured into the global arms business that has become the primary US industry. Well, until you demonstrate an iota of geopolitical or global economic awareness, don't expect me to bother translating your empty words into something to debunk.

Re:IBM is INTERNATIONAL

[markx16]

Ahem, except Japan owns ten times as much of the US debt as China. So economically, Japan could still tell China to f off.

Re:IBM is INTERNATIONAL

[Doc Ruby]

I dunno, Anonymous Coward, I just responded to another post invoking the Japanese Rape of Nanking as a suggestion that Japan was a match for China. I pointed out that a lot has changed in the past century or so, and the tables are turned. Just because I abhor war doesn't mean I pretend it doesn't exist - to the contrary. I'm no hypocrite: we should all be competing in making and using better software, rather than mass murder. And my point, starting out this subthread, is that I don't want to see the US lose that conflict, either.

Re:IBM is INTERNATIONAL

[Doc Ruby]

Except that Japan is now as interested in China's market as in America's. Japan isn't telling *anyone* off. And finally getting the US to make concessions politically impossible for Japan will drive China and Japan closer together, rising on the descent of the USA.

Re:IBM is INTERNATIONAL

[Phragmen-Lindelof]

"IBM's products are manufactured almost exclusively"
Are the rest hatched (from an egg), grown (like wheat), replicated (ala Star Trek), or what? I thought all computers were "manufactured".

I'm sorry.

[Anonymous Coward]

I don't read the New York Times any more; I prefer to get my news from the community.

Could someone please write an unbiased, neutral point of view article about this subject on WikiNews?

Thank you for your help.

Re:I'm sorry.

[CrankyFool]

Hey cool, I think we finally have the news equivalent to "yeah, but as long as it doesn't play Ogg files, I know I and three of my friends will never buy it"!

A moment of silence...

[Oliver Aaltonen]

A moment of silence for the coming demise of the ThinkPad. Now the wait for the PowerBook G5 with "IBM Inside(TM)"... so long as they get rid of the craptacular touchpad and replace it with a trackpoint!

Re:A moment of silence...

[Anonymous Coward]

Well said! One thing that put me off getting an iBook (well, aside from the big logic board failure mess) was the touchpad. Ugh! OK, it's personal preference, but I say this:

Try drawing a square and a circle with both a touchpad and a trackpoint. The latter is WAY more accurate.

Interestingly, some ThinkPads come with both!

Re:A moment of silence...

[Anonymous Coward]

Rumour has it that IBM is negotiating with Apple to license OSX for a new line of PPC based ThinkPads. So you may be in luck.

Re:A moment of silence...

[LiENUS]

My ThinkPad R40 came with both, its very nice. If only it had built in 802.11g though.

Re:A moment of silence...

[fmorgan]

That would be an interesting development, to say the least

Re:A moment of silence...

[RenaissanceGeek]

I, too, eagerly anticipate the release of a Powerbook with an IBM PPC 970.

But if the only built-in pointing device is a trackpoint, there's no way that I will buy one.

I've never been able to make any kind of a curved path with a trackpoint: I either get a straight line, or some nasty zig-zag. And do you know why? Because there's no feedback. It's the same reason that the flat membrane keyboards on the Atari 400 and the Timex Sinclair sucked: there was no direct feedback to your fingers as to whether or not the keypress had been accomplished. The Air Force originally deployed the F-16 jet fighter with a control-stick that operated much like a touchpoint: the stick itself didn't move, but produced control-output proportional to pressure applied to the stick by the pilot; they had to be removed and replaced with a conventional joystick type controllers where the control-output is proportional to the actual POSITION of the stick in order for the pilots to actually be able to perform manuvers with the kind of precision that the airframe is capable of.

It boggles the mind that the same company that sold so many of those noisy-as-hell tactile-feedback clicky keyboards would also insist on such a non-responsive device as the trackpoint.

I don't think so...

[Viceice]

I would think that IBM would only sell it's PC business assets but not it's name.

So LEgand gets a few factories, supply lines, existing customers and thats it.

PC's made in china? So What......

[spidergoat2]

Do they actually make them anywhere else? Last time I looked at my Dell, it had China stickers all over it. This would really be a good deal for Gateway though.

Re:PC's made in china? So What......

[Anonymous Coward]

> Do they actually make them anywhere else?

My Dell has lots of Ireland stickers on it ;-)

Re:PC's made in china? So What......

[The Cydonian]

Last time I looked at my Dell, it had China stickers all over it.

Yes, which is why I think this article is misleading. IBM laptops, at least the ones we use here, have been manufactured by other companies (Acer?) for quite sometime now; just that, IBM tends to be rather strict in its quality requirements. That is, an Acer-branded computer (if indeed Acer were manufacturing it) would probably go through less stringent quality testing than an IBM-branded one, even though they are both manufactured by the same company. This is completely normal and logical; you pay more for better quality.

I really doubt IBM would want to let go of control over its brand, particularly when they have a very successful consulting business up. I think what is really happening is that IBM is changing its suppliers, or trying to re-negotiate its existing agreement(s).

Re:PC's made in china? So What......

[TO11MTM]

Acer? Not sure about the laptops, but last time I checked a lot of IBM's desktop stuff was made by MSI. That was a few years ago though. OEMs can change in a much shorter timeframe than that.

IBM Outsourcing

[Anonymous Coward]

IBM Thinkpad laptops have been manufactured by
a Taiwan company for years ...

Re:IBM Outsourcing

[ikea5]

IBM Thinkpad laptops have been manufactured by a Taiwan company for years ...

That'd be the R series by Acer, who also owns BanQ IIRC.

Shakespeare ..

[Viceice]

As Shakespeare would say:

"A crappy PC maker by any other name is still as crappy"

Pointless

[Anonymous Coward]

even if their PC division doesn't make a cent, by selling it they'll be taken far less seriously where it counts - in markets where they do make money. This doesn't make commercial sense. Would your company be more or less likely to buy an IBM server if they don't sell desktops anymore?

Low cost labor

[digitalchinky]

The less affluent asian countries are great at stamping out billions of plastic hello kitties, I'm sure IBM is only doing it because they/it can 'make more money' at the end of the day/decade.

Lift the cover on any old chunk of IBM hardware, you'll probably find much of it was manufactured somewhere other than America. (The rest of the world does exist by the way :-)

Re:Low cost labor

[Anonymous Coward]

You *DO* realize "Hello Kitty" is a Japanese invention, right?

Re:Low cost labor

[digitalchinky]

Yup, but all the hello kitties I've purchased for my daughter were made in either China or Japan. (Working in various asian countries at present)

Mod me funny

[Anonymous Coward]

There's an affluent, brand-conscious consumer born every minute.

Took me a little while, but I found it.

[anti-NAT]

It's deja vu. Of particular interest is my post to that thread, titled leader vs follower business approach. It hasn't been mod'ed up over there, looks like I get another chance. I usually get modded up for posts I spend time on, hopefully I also will this time. Another chance; Yipee !

Sound business decision...

[craenor]

IBM is a business, and no matter what we may think they owe the PC community, it's still about doing sound business.

IBM has the largest and most profitable Services business in the Tech industry...and anyone who thinks they aren't a LOT more than just a PC manufacturer has no idea who IBM is.

When you get down to it though, Dell has proven that theirs is the only business model that really works in the PC industry as it stands currently. IBM would be faced with the decision of spending billions of dollars to completely change their PC business to try to compete with Dell...or sell that part of their business and concentrate on things at which they excel.

I applaud them for having the courage to move beyond this part of the tech sector and concentrate on things they do better than anyone else does, Services and Proprietary solutions.

Re:Sound business decision...

[Anubis350]

Dell has proven that theirs is the only business model that really works in the PC industry as it stands currently
while in the past this hasnt been true, these days apple's business model seems to be working pretty well (at least its gaining them back some marketshare and revenue).....

Re:Sound business decision...

[TO11MTM]

.... Actually, I've talked to some IT people who wish they worked on IBMs rather than dells. When it comes to those corporate PCs, the IBMs are easier to work on, and IBM has a longer promised time between when a Drive image will not work accross the same model. I've hears horror stories where dell images would be broken in just a couple months.

Re:RTGPP (grandparent post)

[gimpboy]

Not that I necessarily aree with the grand parent post. I believe he was saying that getting out of hardware in general is a smart move. I believe the following statement:

Part of IBM is smart; they're getting out of the hardware business and morphing into a service provider, where they can make big $$$. The stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box.

means that part of ibm is smart (the part getting out of the laptop business). The stupid part he is referring to is the part that continues to sell their server hardware.

Not that I agree with him. I believe there are organizations who require the stability and robustness that IBM's servers provide. I also believe IBM's servers in part fuel their service side of the business.

You say Aptiva, I say Ambra

[amichalo]

According to this website, in 1993 IBM created a PC dividion to compete agianst mailorder companies (Gateway, Dell, et al) and called that Dividion "Ambra".

The article states the Ambra division was miss managed and had poor customer service, leading to it's closure just one year later in 1994. The division would later be resurected as the IBM "Aptiva" line of personal computers many more of us know today.

As a college student I was very pleased with the support I received for my Ambra (386 I believe). The monitor went bad and IBM had a new one waiting for me at my dorm within 24 hours of the service call. I was sad to see Ambra go.

Damn...

[Mephie]

How many times is IBM gonna sell their PC business to that company??

Re:More Issues:Worker's Rights &Environment at

[coopseruantalon]

Let me guess, you're an american... If you are then I think you should look at your own pollution before you start lecturing others.. Same thing goes with torture, workersrights ect.

whois on the domain

[Anonymous Coward]

Registrant:
Rohana Rezel
UNEP RRCAP AIT
PO BOX 4
KLONG LUANG, PATHUMTHANI 12120
Thailand

Registered through: TotalChoice Hosting
Domain Name: MITHURO.COM
Created on: 16-Feb-04
Expires on: 16-Feb-06
Last Updated on: 16-Feb-04

Administrative Contact:
Rezel, Rohana rezelrd@yahoo.co.uk
UNEP RRCAP AIT
PO BOX 4
KLONG LUANG, PATHUMTHANI 12120
Thailand
6625246492 Fax -- 6625162125
Technical Contact:
Rezel, Rohana rezelrd@yahoo.co.uk
UNEP RRCAP AIT
PO BOX 4
KLONG LUANG, PATHUMTHANI 12120
Thailand
6625246492 Fax -- 6625162125

Domain servers in listed order:
NS1.TOTALCHOICEHOSTING.COM
NS2.TOTALCHOICEHOSTING.COM

Famous term

[$exyNerdie]

What will happen to the term "IBM PC Compatible".....

Re:Famous term

[achilstone]

mmm... IBM PR Compatible.

Thats People's Republic folks, now if they were to sell it to a Taiwanese company...

so have Apple

[Anonymous Coward]

does USA actually make anything anymore ?

no wonder that deficit is rising and with traitors moving their companies abroad (india/china/insert 3rd world country to exploit here) will it get any better or worse ?

Re:so have Apple

[Anonymous Coward]

does USA actually make anything anymore ?

We still make things that kill people dead and destroy their homes.

Raise Reputation? No.

[nurb432]

More then likely it will just reduce the quality of the brand of PC formerly produced by IBM.. Down below the 'quality' of 'yet another PC clone' product.

If they make cheap crap now, buying the rights to a quality name/product wont make them stop producing crap...

I hope IBM retains the ThinkPads at least...

Sad really.

Re:Raise Reputation? No.

[Anonymous Coward]

Must be compatable with "The computer previously known as IBM PC"

Re:Yay

[Anonymous Coward]

No try this

So Ballmer was on the right track

[leadsling]

If fact, maybe it's Microsoft behind the whole thing. Ballmer has found the way to create his $100 PC!

Is this a move to make "cell" processor technology

[Anonymous Coward]

more ubiquitous? Think about a cell chip in your TV, or STB, and console game system. Mom and Pop dont need a PC when you have that kind of computing power clustered wirelessly? Your DVR HDD could act as the pc buffer. Add a LCD screen, mix in Bluetooth keyboard/mouse. Voila! Cluster home computing! then......... Profit!!!!

As a matter of fact...

[r6144]

Lenovo makes pretty good computers, based on my only experience with them, the very computer I'm using now.

Will we see AMD-based IBM PCs this way?

[Brian Stretch]

Maybe we'll see Athlon 64 PCs from "IBM" this way. Lenovo is a big AMD customer. They aren't insecurely limiting their AMD64 usage because of a fear they'll outshine Power architecture machines like IBM is. C'mon IBM, listen to your software engineers and sell/promote the good stuff.

Re:Will we see AMD-based IBM PCs this way?

[Anonymous Coward]

IBM sells PC's to the business world, not the home user. Corporations are still stuck on demanding Intel inside. I think IBM would have been happy to offer AMD PC's and deal a little less with Intel heat issues, dropped products, and price gouging. Intel even gives better price breaks to Dell.

Keep in mind that IBM does offer a AMD64 server.

I shed a tear today to think that the Thinkpad may be no longer.

Word of the day:
Foxconn

Re:Will we see AMD-based IBM PCs this way?

[Anonymous Coward]

They are promoting the good stuff. That's why they're getting back to focusing on POWER.

Re:Will we see AMD-based IBM PCs this way?

[Skuld-Chan]

You mean like this? http://www.amd.com/us-en/0,,3715_10757,00.html?red ir=CPB062

Re:Will we see AMD-based IBM PCs this way?

[Anonymous Coward]

> Maybe we'll see Athlon 64 PCs

No. What is more likely is that we will see IBM's PowerPC division bringing out cheap desktop machines running Linux. So far they have been prevented from doing so because it would compete too strongly against the PC division. Now without PCs desktop can move away from Intel/Windows to something IBM makes.

Re: RTFA

[Alwin Henseler]

IBM would be essentially saying "well, we're going to buy generic white box PCs from China instead of supplying our quality systems from now on."

It seems like you're implying that the 'generic white box PCs from China' are inferior to IBM-supplied boxes. That may be true, but need not necessarily so.

I think you could read IBM's move as: "we just can't/won't keep up with the price/performance of generic white boxes coming from China, so therefore there's no point in continuing to produce our own line". And there's also their customers, who may just be saying to IBM: "look, we're sorry, but we'll be getting our generic desktops from China now on, they're cheaper, but good enough to do the job".

That wouldn't stop IBM from cutting a deal with a quality supplier, put "IBM" labels on the boxes, and offer those to their customers. It seems IBM just feels it isn't worth it anymore to produce those desktops themselves. Makes sense, if you ask me. Plenty suppliers out there to choose from.

eXtreme Programming: Comment early, read often, reply frequently, moderate mercilessly.

IBM and China

[Anonymous Coward]

IBM's business in China dates back to the 1930s with the installation of "a business machine for a hospital in Beijing."

In the 1980s, IBM opened representative offices in Beijing and Shanghai, followed in 1992 by establishment of the IBM China Company Limited, a wholly-owned subsidiary of IBM World Trade Corporation. The IBM China Research Laboratory was established in Beijing in 1995. Today, IBM China has offices in 11 cities and operates eight joint venture companies in China.
--PrimeUR

IBM built and operates a chip packaging plant in China (registration site), a Research Laboratory in China, and is eyeing upward of a 50 percent share of China's market for business computers. Even IBM mainframes are big in China

IBM is creating a chip ecosystem in China and expects that Asian manufacturers will represent the bulk of the new Power licensees

Re:More Issues:Worker's Rights &Environment at

[Bishop]

Except that Lenovo has already bought IBM's personal computer manufactureing. Yesterday's articles clearly stated that Lenovo already builds IBM's computers, and that IBM only oversees the design.

IBM to change their name

[Anonymous Coward]

This just in, folks! IBM will now change it's name from International Business Machines Corp. to: International Business Services Corp. (IBS), since all they have left now is services and software.

And don't tell me this move to sell the PC company is due to lack of profitability. If the sales teams inside IBM would take two minutes to sit and work together, they could produce packages for companies that would beat any competitor hands down! Very few companies can even match a sale package that includes hardware, software, services, and support - all from the same company! Hey, something went wrong with the package? call one number to get all your answers! Scale this down to the individual computer and you can see the Dell's and HP's of the world being so popular over someone building their own PC.

Even still, this is one of those divisions that you hold onto if you are a company like IBM. Seriously, shareholders will look at this and start to wonder what's left.

And what do we tell the thousands of employees of the PC company about the sale of the PC company to Lenovo? Think back to the sale of the network hardware division to Cisco back in the 90's. If that was any inclanation as to what will occur, Lenovo will take all the designs, plans, and architecture of the PC division and leave the people behind.

IBM can't compete on the market...

[AetherBurner]

IBM's Thinkpad market has issues. The rest of the manufacturers are doing rings around them. AMD64's, 3 GHz Intel's, etc., while IBM still sits on 1.6 GHz/1.8 GHz. The base IBM laptop hardware may be built like a rock and look and feel like it, but when the purchasing public can buy a machine that has a widescreen display, reasonable sound, AMD64, FireWire, for half the cost of the Thinkpad, I know where the money ends up and it is not in IBM's pocket. Whenever you compare apples to apples, the bushel that costs less for the same quality will usually get purchased. Yes, I like the trackpoint better than a touchpad. I would rather use a mouse than a touchpad. I was thinking about buying an IBM laptop for myself but when I can get a laptop with better features and the latest hardware for half the cost, IBM dropped out of the running. Methinks that IBM rested on it name believing that because it says "IBM" on the lid that the crowd will buy their overpriced, antique hardware but they goofed on this one, big time, and they only have themselves to blame.

Re:IBM can't compete on the market...

[Anonymous Coward]

You don't understand the laptop market. The Intel Pentium M 2.0 GHz performs as well as 2.8Ghz - 3.0Ghz Pentium 4 chips. The entire point of using the more expensive Pentium M chip (part of the Centrino branding) is superior battery life with the same performance.

High end T series can run as long as seven hours on one charge. The T series is also full featured at that.

Most laptop users want a laptop, not some Sci-Fi kid's dream of a gaming machine that'll fit in a suitcase.

Re:IBM can't compete on the market...

[Anonymous Coward]

Hang on......

Please, for a moment if you forget about the consumer "my screen is bigger than yours" and "I can put more p0rn on my laptop mentality" and think about the real _business_ workhorse-mass-deployment (as opposed to status symbol) laptop market, the rest of the industry still has a long way to go to get to the thinkpads.

my thinkpad had fell off my desk, stood on (accidentally), fell out of my car etc etc and its still going. I am on my 4th thinkpad now since my first like 8 years ago.

they don't look a lot, but they aren't made to be fashion accessories.... however if you're real mobile user looking for a real workhorse, you CANNOT go pass a thinkpad.

Then again, if you only want a laptop so you can show off to your wa*ker friends at the cafe during lunch break that you have a laptop.... get a viao.

Is it just me or do others also notice the readers of /. has have fell off from the knowledgeable to generally ISP support level grunts who thinks a dual xeon server is "big iron"? ....smite me, I don't care about Karma

Re:IBM can't compete on the market...

[Anonymous Coward]

You seem to forget that Thinkpads are BUSINESS ORIENTED. Do you really think business people want to carry around bricks that have only 2 hours of battery life?

And look at some benchmarks. Dothan's performance is more than enough compared to the hot, power hungry P4s and AMD64s, and offer superior battery life.

Re:IBM can't compete on the market...

[Anonymous Coward]

Ahhh, someone who hasn't used a Thinkpad. I always love hearing these claims of getting the "same quality" for "half the price". Test drive a T-42 and then any other laptop, and then we'll talk.

It's not just the Trackpoint. It's the amazingly durable construction. It's the light weight. It's the solid keyboard. It's the professional look. It's the built in keyboard light. It's all those little carefully designed perks that you can't live without once you've had them.

Sure, if you can't afford it that's fine. But don't claim you're getting the same quality when you pay half the price for a piece of shit Dell with the latest and greated Intel CPU.

Re:IBM can't compete on the market...

[Anonymous Coward]

> The rest of the manufacturers are doing rings around them. AMD64's, 3 GHz Intel's, etc., while IBM still sits on 1.6 GHz/1.8 GHz.

You mean the 1.6-1.8 GHz Pentium Ms (not Pentium 4-M) that crush the 3 GHz P4s in most every benchmark, yet use significantly less power?

Re:IBM can't compete on the market...

[zahg]

I totally agree, the ThinkPad (apart from the Apple range of laptops) are the truest incarnations of a laptop computer out there, a truly mobile designed portable machine. Amazing and practical build with beautiful no-nonsense looks. Titanium casing! THE BEST KEYBOARDs! Trackpoint is just wonderful to use.
Being a gamer I've been kinda pissed off they haven't created an acceptable gamers laptop altho they have finally come out with the T42 that has an ATI 9600 gfx card.
I currently have the use of an IBM T23 and this 2 year old baby is still a dream to use when I'm not using my bedroom desktop setup. Have also been using the recent T41 and again what a beautiful piece of engineering!
I at least hope somebody realises how much of a market there is for a super-mobile, sensible, practical and tuff laptop!
-zahg

Hold on, let me check

[Mordack]

Hold on, let me check.
Nope, still not there.
Maybe now? I'll check again. BRB
No, I still can't find any IBM stickers like this one.

age old wisdom

[justforaday]

I guess we'll find out how true the saying really is...

Nobody ever got fired for buying IBM.

Just so they're not wrapped like Barbie dolls

[Anonymous Coward]

Ever wonder why the toy industry in China employs so many people?

Well, I have a 4-year-old daughter, and I know.

Those millions and millions of toy workers in China are using 99.5% of the world's supply of scotch tape and wire tie-wraps to ensure every single toy they ship from China won't be able to be removed from its package by anything less than a two full-grown adults armed with wire cutters and knives.

You say Dividion, I say division

[SunPin]

http://www.computercraft.com/docs/ibm.html According to this website, in 1993 IBM created a PC dividion to compete agianst mailorder companies (Gateway, Dell, et al) and called that Dividion "Ambra".

Dividion? Twice? That's one of the more creative examples of spelling I've seen it awhile. Bravo!

Re:You say Dividion, I say division

[Anonymous Coward]

the d key is right next to the s key.

Re:You say Dividion, I say division

[curious.corn]

Dividion? Twice? That's one of the more creative examples of spelling I've seen it awhile. Bravo!

I'm only italian... shouldn't that be "...one of the most..." ?

Re:You say Dividion, I say division

[Anonymous Coward]

houldn't that be "...one of the most..." ?

Not necessarily.

In conclusion, I'd just like to say that I love the way you Italians say 'fork'.

IBM is international

[Linuxathome]

It's interesting that some view Chinese companies (or any companies outside the US) as foreign vis-a-vis IBM. Last I checked, IBM stood for International Business Machines. I personally don't see it as a risk to their reputation.

google news

[fldvm]

This article is on the front page of google news w/ slashdot as the 1st source. I am starting to loose respect for google.

China's Pebble Beach?

[michaelmalak]

Is IBM just going to buy it back after the rise and fall of the Chinese economy?

Re:China's Pebble Beach?

[ulatekh]

No kidding. I can't figure out why it hasn't happened already. They've polluted the heck out of their country. Their currency is pegged to our dollar, and since the U.S. Government is apparently willing to let the dollar fall, that raises the price for their huge raw-material imports. They continue to turn a blind eye to their AIDS crisis; their own government blood-donation centers are responsible for many of the infections. Corruption in the Chinese government is endemic. Their own internal surveys indicate the people are fed up with them. All the money they're generating with exports apparently can't solve these problems, and the problems just go on and on...

How does China do it? Do they? My best guess is that they will implode all of a sudden and surprise the world, much like the Warsaw Pact did in 1989 and the USSR did in 1991. I just can't figure out why it hasn't happened already.

Re:China's Pebble Beach?

[rasactive]

China: The country that manages to be simultaneously third and first world.

Chinese/Indian H-1Bs and Offshoring

[Anonymous Coward]

A large percentage of SlashDotters are Indians and Chinese. They do not care about the American economy.

Most of them have advanced degrees in engineering, and they surely understand economic principles. For example, when the American government intervenes in a "shortage" in the hi-tech labor market by importing H-1Bs, the American government is destroying an important force in a free market. That force is the "shortage". It raises wages and improves working conditions.

Your typical Indian/Chinese bigot then says, "Hey! I'm getting paid $80,000. I'm not lowering wages." See how deliberately deceptive a Chinese bigot is? He lies about economic theory and practice even though he has a Master's Degree in engineering.

Now, allow me to explain the fallacy of the Chinese bigot's statements. If the Chinese H-1B were not available to American employers, then American employers would be forced to raise the salary of the vacant position from $80,000 to, say, $100,000 and/or be forced to improve working conditions by reducing the week work from 55 hours to 42 hours.

Further, offshoring jobs to China hurts the American work environment because Chinese workers have no rights, and Chinese companies do not spend the money/effort to protect the environment. In order to compete, American companies are forced to act in a similar fashion, or they will go bankrupt.

Re:More Issues:Worker's Rights &Environment at

[dizee]

you're an idiot.

oooh, they both have "finger mice" - you mean pointing sticks? whooopidity do, who cares, that's not a reason for buying another company's PC division.

corporate social responsibility? open your eyes. no such thing exists.

in any case, that's no reason why lenevo can't have ibm's pc division. western culture has expanded far enough. quit with your quest for world domination.

-mike

Obligatory

[revolvement]

In Communist China, only old Koreans buy IBM from YOU(if it can be made into a beowulf cluster that runs Linux)!

Agreed. No CSR in China.

[Anonymous Coward]

I agree with the parent post. There is no corporate social responsibility (CSR) in China, which includes Taiwan province and Hong Kong.

By contrast, many American companies practice CSR. Reebok is a good example and, for many years, has sponsored Amnesty International.

Another good example is the American companies who abided by the Sullivan Principles during the height of apartheid in South Africa. The Principles mandated that companies shall hire and promote regardless of ethnic background.

Let's be fair here. American and Western companies are starkly different from Chinese and Korean companies.

How many critics have even seen a Lenovo computer?

[cyberon22]

Your concerns on the environmental front are valid, but Lenovo is an assembler and marketer. Pollution takes place higher up the value chain.

Two things to remember: Lenovo is a Chinese firm and largely avoids paying the Windows tax. The extreme competition in computer assembly (the company *is* undercut by small businesses) suggests it lacks the ability to truly abuse workers in the sense of paying them below market wages.

FWIW, I work in China and would have bought a Lenovo for my last laptop, but needed an international warranty and so went with Fugitsu.

Re:More Issues:Worker's Rights &Environment at

[MrWim]

pollute the environment, creating a hazard for all Americans.

Because americans aren't the most polluting populace in the world?

This is FUD

[Dark$ide]

There's not a single mention of this on the IBM website. It's FUD. It's a made up story to sell extra copies of the New York Times. Take it with a pinch of salt.

Is Lenovo Chinese government owned?

[wheelbarrow]

Does anyone know if Lenovo is owned in part or full by the Chinese government? If so, then I would have a real problem with this sale given the nightmarish human rights record of the Chinese government.

Re:Is Lenovo Chinese government owned?

[Anonymous Coward]

And USA and its corporate citizens are a lot better with whats happened in camp x-ray, iraq and events like bhopal in India....

oh I could go on but the bottom line is that China is a growing country with growing pains. You want to tell me USA (and ANY other country for that matter) is squeaky clean in its human rights over history?

If you extract your head from your a** for a moment you'll notice the PC you're looking at is made in China/Taiwan/Asia.....

Read less slashdot, read more news.

I thought the New York Times

[hoborocks]

required a "soul-sucking" or "invasive" or "evil communistic fascist nazi" registration? Guess they've changed?

Re:Agreed. No CSR in China.

[dizee]

tons of american companies practice CSR. like worldcom, adelphia, charter, infineon, rambus, intel, microsoft, enron, etc, etc...

get real. most companies do that sort of thing for advertising purposes. give a chunk of change here and become a "platinum sponsor" and get your name in bigger letters than all the other sponsors!

there is no such thing as corporate social responsibility. corporations, for the most part, are out to fuck consumers over. there are some, i'm sure, that have some measure of social responsibility. but the behemoth, as a whole, cares about nothing but its own bottom line. sponsoring amnesty international is good for reebok's future, i'm sure they see increased sales because of it.

by the way, if you're going to title a link "Rebook is a good example and, for many years, has sponsored Amnesty International", the link should actually link to a document detailing reebok's relationship with amnesty international and not their front page. i will now assume that you are lying and an idiot.

-mike

Re:How many critics have even seen a Lenovo comput

[Anonymous Coward]

FWIW, I work in China and would have bought a Lenovo for my last laptop, but needed an international warranty and so went with Fugitsu.

Damn.... you'll certainly need it when the lousy Fujitsu HDD breaks down. Remember that fiasco?

I wouldn't touch Fujitsu *anything* with a barge pole after that.

Just my luck...

[Beatlebum]

IBM tech support is fantastic, so much so that I just purchased a 3 year extended warranty on my Thinkpad. I guess that's $100 down the drain.

Know your Markets

[nucrash]

Dell doesn't just sell PCs though, they have moved into a broader industry for the same reason IBM is getting out of PCs.

Profits are slim in PC manufacturing, so get your Dell Jukebox, or Dell Axim, or Dell Plasma TV.

Dell caters to a much broader audience in their PCs than IBM does. How many IBM PCs that you know of that can play the latest PC games? How many Tablet PCs has IBM made? How many Media Center PCs has IBM made?

Tell me if you see a pattern. If it isn't strictly for the business man, IBM doesn't care to touch it.

One of the reasons why I have strayed from IBM workstations and IBM desktops is the fact that they just simply aren't remote enough to reach me here in BFE, a local vendor does a far better job of support.

Don't think for a second that I would give up my AS/400, err.. iSeries, err.. i5.

undermining our own way of life

[guet]

We transfer technology paid for by the US government (research, infrastructure) and US consumers (far higher prices, our taxes that pay for research and infrastructure) over to foreign countries

The world does not owe the west, and in particular the USA, a living.

Yes completely free trade is a Bad Thing, but your proposed alternative of attempting to keep all production/design in the United States is just not going to wash given the new econimic power of many Asian nations. Why should they accept an unequal partnership like that?

Isn't it possible to encourage better working conditions everywhere rather than just in your own backyard? (By using the WTO and protectionist measures where necessary).

Re:undermining our own way of life

[KarmaMB84]

The WTO has already shown that it intends to insure the US cannot compete in trade or even decide whether imports coming in are legal. They don't care what our working standards are.

Re:Agreed. No CSR in China.

[Anonymous Coward]

tons of american companies practice CSR. like worldcom, adelphia, charter, infineon, rambus, intel, microsoft, enron, etc, etc...

get real. most companies do that sort of thing for advertising purposes. give a chunk of change here and become a "platinum sponsor" and get your name in bigger letters than all the other sponsors!

So what? IMHO it dosen't matter why they do it, just matters that they do it at all. Name just one Chinese company that shows even a modicum of CSR, I dare you. In any event, the fact that CSR makes for "good advertising" for Americans whereas the Chinese couldn't give a fuck what their corporations do speaks alot to the difference between Western and Chinese culture. Yeah, maybe all corporations are out to fuck us over, in fact you're probably right. But given a choice between corporations that are at least culturally expected to be responsible, and facist corporations that will lie, cheat, pollute the environment and violate the human rights of their workers just to make a profit, I'll gladly take the former rather than the latter.

Desktops too

[Aggrajag]

And desktops are (were?) made by Wistron which is part of Acer (or at least used to be). Wistron (then IMS) used to build IBM desktops at their plants in Tilburg, Netherlands, alongside with Acer's own brand desktops. The factory was later moved to Hungary.

Uh.

[TheLink]

What's in it for Lenovo?

What would they get and how much would they have to pay for it?

Lenovo could use the same money to market their brand instead.

Acer lags in brand-recognition coz their computers used to be suckier than the rest (I don't know about now) and they weren't cheaper either.

Tons of US people buy Japanese cars. Now the Korean cars are gaining share.

Re:Uh.

[tj13009]

Do you know how many employees there are in IBM's PC Group in the US and also internationally, that will be effected by this sale?

Duplicate!

[scottme]

Does nobody read yesterday's news?

Grandparent Article is Right. Chinese Stink.

[Anonymous Coward]

I appreciate the chance to condemn Chinese society. The Chinese, indeed, do not care about corporate social responsibility (CSR).

Finding the link that explains Reebok's strong support for human rights and corporate social responsibility (CSR) is relatively easy. Chinese folks have trouble in finding the link because they are lying.

By the way, Amnesty International itself gave Reebok an award for its excellent commitment to human rights and CSR.

Chinese culture and Western culture are very different.

Further, at the web site for the Silicon Valley Toxics Coalition, you will find that all the companies which received a passing grade on the environment are American and Japanese companies. There are several American companies that failed. However, all the Korean and Chinese companies flunked.

Also, many American companies are committed to corporate social responsibility (CSR). The best example of their commitment to CSR is the Sullivan Principles. All American companies, with the exception of Marathon (now bankrupt), in South Africa abided by the Sullivan Principles to hire and promote employees without regard to their race or ethnicity. The Sullivan Principles helped to end apartheid in South Africa.

Indeed, Chinese culture and Western culture are very different.

Not so fast...

[tjstork]

I wonder if the Chinese would buy my shareware company?

Re:Not so fast...

[Impy the Impiuos Imp]

Unless it's skilled at making copies without copyright, I doubt it.

Still, Asia is building skyscrapers like mad while we don't, excepting a replacement for non-business, purely emotional reasons. Will they become economically powerful or will their residual communism and heavy-handed socialism crush them like a newborn bug?

IBM's QC Standards

[TFGeditor]

Manufacturing outsourced, yes, but the finished motherboard/product subject to IBM's QC standards. The standards go away with the sale. Hence, the frugal communist Chinese overlords adopt their own less stringent standards and start producing crap.

link to article, no registration required

[creynolds]

FYI most NYT content can be accessed using a free permalink like this one. For more details see New York Times Link Generator.

Demand for cheaper PCs drives outsourcing/offshore

[aristotle-dude]

I hope you people who say macs cost too much are happy. You guys pushed companies to outsource/offshore IT/tech jobs to satisfy your insatiable demand for cheaper and cheaper products. So you now you can afford to buy more technology products on your minimum wage you earn at the local burger joint. The only problem is all the higher wage jobs you had hoped to upgrade to eventually are now gone.

They were destroyed by lower price demands, and monopoly pressure tactics. What we see here is a cannibalization of the PC industry and it all started with the emachines/Gateway and companies like, IBM,HP and Compaq lowering their prices/margins to razor thin profit margins to compete against the crap boxes. Now it is no longer feasible to innovate anything in the X86 industry. Unfortunately, their costs (components) did not magically drop in response.

Too bad that cheap hardware is crappy. (See Dell recalls for faulty power supplies, exploding batteries, issues with LCD screens, faulty VIA chipsets etc..)

The old adage "you get what you pay for" holds true.

Re:RTGPP (grandparent post)

[jimicus]

Part of IBM is smart; they're getting out of the hardware business and morphing into a service provider, where they can make big $$$. The stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box.

means that part of ibm is smart (the part getting out of the laptop business). The stupid part he is referring to is the part that continues to sell their server hardware.

Except that there are a number of server divisions within IBM:

xSeries: x86 based, generally runs Linux or Windows.

pSeries: POWER based midrange kit, generally runs AIX though Linux is an option.

iSeries: What was the AS/400. Mainframes. Expensive and poor bang per buck, but there are applications out there which won't run on much else.

zSeries: IIRC, what was the S/390. Anyone care to confirm?

The problem is simple: The low end server hardware doesn't carry a great profit margin. The high end mainframe kit has a good profit margin but demand is low, particularly considering that comparable if not better performance can be achieved with a relatively low end server. Cluster a few together carefully, and you can get pretty damn good reliability too.

However, IBM has found a solution to this problem: sell the consultancy and support to tie it all together into a complete solution.

Quality control

[Sycraft-fu]

Being made in China doesn't really mean anything either way. It could be made in a modern factory using high quality parts with stringent quality controls, or it could be made in a plant where anything goes, so long as it gets out the door. The location has nothing to do with that.

Which one of those scenarios happens is up to the company that is having the hardware produced. IBM is definatly more the former. Their products are known to be quite high quality. If this Chinese manufacturer is all about cheap PCs, that's likely not to be the case. Quality and price are basically always inversly related.

So that's the concern, that this company will move from quality manufacturing with quality parts to cheap manufacturing with shoddy parts. Has nothing with the location of production, jsut with the mentality of companies.

No, AC... (OT reply)

[Anonymous Coward]

It isn't just you...

Apple

[Anonymous Coward]

IBM should make an offer to apple computers or hp! IBM alreay makes the G5 processor. And my Mac comes with an IBM hd.

Cowboy Neal is Wrong, again.

[Anonymous Coward]

Interestingly, no one here seems to have any real information about the reasoning and details of the potential "sale of IBM's PC business". The truth of the matter is that IBM is only interested in selling the MANUFACTURING END, not the BRAND. There will still be IBM PCs and laptops, but they will not actually be built by IBM.

How do I know this? I asked.

Yes, this is also bad news, but in detail it is quite different from what is being claimed here, as usual.

what's the point?

[btnheazy03]

90% of all electronics/hardware come from china anyways. what difference does it make if they slap an IBM logo on it? and besides, all major electronics makers have been outsourcing to mainland china for years beacuase of the rock-bottom prices on manual labor .. which means they're experienced, right? right? hello?

Please don't kill the Japanese Thinkpad design lab

[Anonymous Froward]

Hi IBM folks,

Though my Thinkpad T40 was assembled in China, I understand that most, if not all, of the Thinkpad design came from your excellent Japanese lab. As far as I can say, your lab is one of the few that understands the balance between durability, usability and portability: Unlike Dell and HP ("bulky, heavy, suitable only for U.S. where people don't walk"), and unlike some Japanese makers ("make everything smaller, no matter how fragile it gets, and you have some unusable tiny keyboard as a bonus!"), your lab always provides some excellent machines that I can actually carry around and comfortably type.

IBM, please don't kill these guys. If possible, please consider branching out a new company specializing in laptops (just as you did for Lexmark). Cheap hardware makers don't need these guys I think, and I don't want to see your lab simply closed (or converted to a software lab). I see Apple is making a great progress in this "durable, portable and usable" segment, but I hope there's some healthy competition even in such a small niche.

Re:RTGPP (grandparent post)

[benzapp]

iSeries: What was the AS/400. Mainframes. Expensive and poor bang per buck, but there are applications out there which won't run on much else.

AS/400 machines are minicomputers, not mainframes. They are also quite competetive on the market, and have been around for almost 20 years.

zSeries: IIRC, what was the S/390. Anyone care to confirm?

Those are mainframes, and are currently some of the fastest machines money can by. Want a mainframe with several hundred processors and a several hundred gigs of ram? You can get a zSeries with all of that.

Oh, did I say they run Linux?

Can't hold it back.

[Epicanthics]

I found this thread so disturbing I registered an account just to post a response.

It seems that every time a Chinese company is brought up here or anywhere else, the response is the same. All the assumptions being thrown around in these that Legend Computer, and any other Chinese company for that matter, is a crap-peddling puppet of the government that abuses its workers are founded on pure ignorance.

Lenovo, for one, is Asia's biggest PC manufacturer (non-Japan, that is) because it sells products people can actually afford. They've done more to help get the average Chinese citizen computer literate than any other private firm. Their machines are far from "crap." In fact, for the price, their machines are a far better deal than most American brands. (They also have spiffy "idiot" keys that reverts the machine to factory settings, which is pretty darn useful)

This move is just an attempt to break into foreign markets as well. Instead of automatically assuming that the IBM brand is going to crap, I see Legend using the assets from this deal to at least attempt to start producing more high end products. Given the fact that most PC's are manufacturered in places like China anyway (the Compaq I'm typing this on was made in Shanghai), such a move up wouldn't be difficult. One more company competing in the desktop market isn't a bad thing, especially given the threat that Dell sees in Lenovo as a potential rival.

The "ties" with the government amount to nothing more than some exclusive government contracts (just as Kosher as that "buy American" nonsense they have here). The company is also owned (65%) by the Chinese Academy of Sciences, but it began as and has always acted autonomously as a private firm based on western business models (specifically, it's modeled after Dell). Buying IBM isn't Chinese expansionism, it's a company trying to gain a competitive edge.

It's also likely that the biggest shareholders in a company such as Lenovo just happen to also hold government positions, thus making the company technically "state-owned." Another example is that one of the owners of a startup ISP in China was a proffessor at Hangzhou University (family friend) who used his dual position to make business arrangements (SOP over there); the ISP is considered state-owned but certainly doesn't operate that way. The whole question of what is considered state-run and what is private in China is a lot more complex than just who has how many shares in what.

Many of the labour problems associated with Chinese companies are the result of this privatization and lack of regulation and not some arbitrary government oppression like many people seem to think. If anything, the government needs to be more involved (and it's trying) in regulating private enterprise.

That an article dealing with a business decision undertaken by a private Chinese company could spawn comments on the government's human rights problems is disgusting. It's equating the economic progress, the one positive hope for prosperity that the Chinese people could grasp in over a hundred and fifty years, to the shortcomings of the state.

If Legend brand ever comes to the states, I'm buying one.

Rant over. Going back to work.

Re:Can't hold it back.

[willabr]

Thanks for the info Mao.

Re:Can't hold it back.

[Anonymous Coward]

Willabr, you're an idiot... or is that spelled A-M-E-R-I-C-A-N?

(3) Profit!

[geoswan]

Five, ten, fifteen, twenty years ago generic clones were a lot cheaper than name brand computers. But this last few years the difference in price between a name brand computer and a generic clone has shrunk. I used to build my own machines, for my self and my friends. But I can't do so anymore -- not for less than the cost of a store bought computer.

If the profit to be made making these computers is slim, why not sell that part of the business to a place with lower labour costs? They aren't selling their chip foundries, are they?

Re:(3) Profit!

[Anonymous Coward]

Price is only one reason to build your own PC. I've always thought that the best reason to build your own PC is that you decide exactly what goes into it.

I enjoy performance and reliability of my machines, have had so much fun playing around with them (with the occasional mod), and saved a few bucks as well.

Re:RTGPP (grandparent post)

[Impy the Impiuos Imp]

> AS/400 machines are minicomputers, not
> mainframes. They are also quite competetive on
> the market, and have been around for almost 20 years.

Perhaps competitive if by competitive you mean in the same sense that you can probably find some Burroughs B4800's still in service and being maintained expensively -- but not as expensively as porting the software.

Re:More Issues:Worker's Rights &Environment at

[vidarlo]

A side issue is the sale of sensitive technology to Lenovo, which may have connections to the Chinese military.
Huh? Afaik (have not RTFA), it is about selling it's PC division, which hardly have any sensitive information. Even Big Blue builds the desktop/workstation boxen of commodity parts, which Chinese governement can buy freely anyway. It is not Big Blue's research division or anything like that they sell of. And for the connection with the military: IBM, SGI , and others have contracts for (and probably deep bindings with) pentagon, which as far as I know, has been trough more wars than China, and probably killed more people, in wars that has no relation to USA what so ever. So I'll highly question your argumentation.

You don't work for the Govt do you?

[MoronBob]

Large Government agencies are most likely the reason
that IBM still offers the AS/400. There is no money in new customers for it but they can charge big bucks to the military and government agencies who don't have the choice to upgrade without an act of congress. They price is somewhat justified because it is less profitable to continue to support older technology with a small customer base.

They are however giving customers other options like running OS390 on Power5 Frames in a logical partition next to AIX and Linux. I have heard a rumor that soon you may be able to run MS OS's also. This frame (P5 595) just took the lead
with 3.2 million tpmC.
http://arstechnica.com/news.ars/post/200411 20-4412 .html

With machines like this I'm not so sure IBM is getting completely out of the hardware market. They have surpassed Sun in sales of UNIX machines and may soon have the majority of market share if they don't already.

For Obviscated Bloatware like PeopleSoft I wouldn't run any other hardware but IBM.

Re:You don't work for the Govt do you?

[the_mrshiny]

I personally know of no major government AS/400 / iSeries accounts. I'm sure there are probably some squirreled away somewhere, but none are members of IBM's Large User Group, for instance. The main install base of these systems is in distribution/manufacturing companies, insurance companies and the hospitlity industry. Examples include Costco, Nintendo, Allstate, Disney resorts and just about every Las Vegas casino. One chief iSeries customer (after a failed migration to MS-SQL Server)is Microsoft. Right now, the pSeries (AIX) and the iSeries on Power5 are basically the same box. They are both manufactured on the same line from almost entirely the same componants in Rochester, MN. What's more, the install base is fiercely loyal and always have been. These people are rarely forced to remain on the iSeries. Instead, managent sometimes forces them off (which ike the Microsoft case is usually a long term bad decision). Frankly, if you want the most technologically advanced business computer available, buy an iSeries (starting at about $15k)!

Everything comes off the same assembly line

[gelfling]

Every PC sans Mac comes off the same half dozen assembly lines. They just vary the plastic wrapper and the name badge.

dells are made in china

[rofthorax]

this is the truth..

So why should this suprise me.. Note my
last machine was made from chinese parts, I
bought it off of Ebay.. And its worked like a charm,
not once did I have to send it in for warantee service.

Random thought

[MasTRE]

Anybody else think Lenovo is a step down, as far as names go anyway, from Legend?

IBM to exhibit at SCALE

[Anonymous Coward]

IBM reps will be exhibiting and speaking at the Southern California Linux Expo this February in Los Angeles, CA.

Purchase may be announced today

[Grotius]

According to The Deal, talks may be successful and The Company may announce an agreement to purchase IBM's PC business as early as today.

Re:More Issues:Worker's Rights &Environment at

[Anonymous Coward]

... standing up to your beliefs, having the courage to say "no" if you don't agree with something, not being such a pushover, ...

He ;-)