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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."
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.
Ignorance is curable, stupid is forever.
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.
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.
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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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.
"She's furniture with a pulse"
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.
Yeah, right.
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.
--
make install -not war
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.
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
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.
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.
-- john
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.
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.
Hang on......
/. 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
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
Because americans aren't the most polluting populace in the world?
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.
> 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.
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