Slashdot Mirror
Going, Going, Gone: IBM Sells PC Group To Lenovo
It was rumored before, but now, as Rick Zeman writes, "It's official: According to news.com, IBM has sold their PC business in a complex arrangement where, 'under the deal, IBM will keep an 18.9 percent stake in Levono. Lenovo will pay $1.25 billion for the IBM PC unit and assume debt, which will bring the total cost to $1.75 billion. Lenovo will pay roughtly $650 million in cash and $600 million in securities.' Plus, Lenovo will be able to use the IBM and Think names for 5 years."
Does anyone know anything about levono? I love my thinkpad and would hate for the new ones over the years to fall off in quality.
Wow, hard to think the IBM Thinkpad I'm typing on now will be made by the Wal-Mart of computer manufacturers. The FA mentions that Lenovo doesn't spend much on R&D, doubtful they would make drives that survive the 6' fall IBMs do. In my circles, IBM laptops are known as "expensive", "tought", and "secure". Especially since many of them come with BIOS locked biometrics. Sad to see this happen, but I guess the PC market is going commododity.
In the short term I guess using the IBM and Thinkpad name will help them out but in the long term they aren't going to do very well if they don't get people to remember their name with the IBM quality. On a side note I hope that IBM really does merge with Apple because after this deal I think I am not going to get another Thinkpad and start buying Powerbooks instead.
just because your a schizophrenic doesn't mean people arn't really out to get you
And I won't be the last to say that this is an end to an era, at least for the thinkpad series. Stories of tech confrences and the sea of black notebooks are legendary.
If not for the stock premium caused by the iPod it might make sense to buy a company known for its superior product design, as IBM focuses on proving more value (and charging higher premiums for it) to clients than the commodities themselves provide, but here it is selling a well-regarded laptop line for a bargain... why would it turn around and by one for a huge premium?
Who do you get to be an expert to tell you something's not obvious? The least insightful person you can find? -J Roberts
That's a damn expensive IBM PC unit. The clones are a lot cheaper, people.
Uh, what? They didn't buy a PC, they bought a whole PC Business. Unless you mean the clone makers are also cheaper, but that doesn't make much sense either - Gateway's brand name is nothing compared to IBM's.
I don't suppose you've ever used a Thinkpad or you'd know why it's a sought-after business. I'd be surprised if they weren't still the top selling laptops (they may not be, I'd just be surprised if that's the case), and they're still by far the best built mainstream laptops you can get (don't even bring up Apple, people - if you do, you have no idea what you're talking about). They're also among the last major makers not to pre-load their PC's with large quantities of junk. You buy most Thinkpad models and you get a PC and an OS. What you do with it is up to you.
I think this is a sad day, quite honestly. Things change in the PC industry and nothing against Levono or Lunovo or whatever Legend's calling themselves these days, but I don't have much confidence that the quality of the Thinkpad line will be maintained. At best, within five years you'll see cost-cutting to the point where there's little to distinguish them from other laptops. I mean there's a reason IBM sold this unit, after all - they can't charge enough for these things to make a meaningful profit on them given the production costs, and they can't realistically cut costs themselves because the quality is the main reason people buy them. So, they've cut and run, and left Legend to do the dirty work that they couldn't - which is more than likely to basically gut the hardware and sell off all that currently bare desktop real estate until the line is profitable. I just wonder if anybody's going to still buy a Thinkpad under such conditions, because people buy Thinkpads now specifically to stay away from cheap crap.
I guess this is why they've only got a five year window to brand them as IBM Thinkpads - IBM doesn't want their name sullied as part of the deal. Which begs the question, what's really in it for Levono? What do they do in year six? So they end up with a bit more production capacity than they have now; is that worth billions of dollars? They're not getting any major branding out of this deal that I can see, or any IP, or anything else that they can really build off of. It seems very short-sighted on their part, doesn't it?
I've been around the business world for a while now (25+ years) and this just doesn't seem right. I have bought businesses, been working for businesses that got bought etc - and deals like this take 6 months to a year minimum. It seems like it was last week that the news read 'IBM has decided to sell'. Was that story completely off timing or is there something else going on?
Anyone know the inside scoop? Assuming it was really 6 months ago IBM started shopping for a buyer there has to be a lot more to the story.
slashdot troll = you make a compelling argument I do not like the implications of.
This would give them a $50-75 cost disadvantage versus everyone else. Now they can support Linux 100% and leverage the Power / grid architecture into other areas. Incl. making reference designs available to OEMs
Help fight continental drift.
or will it go down in history as a bigger flop than the new Coke?
Will people continue to purchase IBM desktop computers and laptops if they know IBM will no longer be the company behind the name?
Will IBM be reducing the volume of CPUs and other components they will be purchasing and thus lose some of the opportunity for future influence and input on future processor design and technology destined for the consumer and business desktop markets?
Actually I'm not entirely certain what it is that IBM has sold seeing that its computers and laptops are made by other companies including some in China. In fact the IBM servers we bought (X330, X335, others) had "Made in China" stickers plastered all over the internal components and chassis pieces. I suppose the logic of this sale will become obvious in the time to come however I still see it as a potential mistake by a misguided manager or group of managers.
I was going to buy a Thinkpad T42 but now I'll get an Apple Powerbook on it's next rev (January in all likelihood).
BTW Apple is #1 in Laptop customer satisfaction. I love Thinkpads (I have 2 right now) but I won't buy a Levono Thinkpad.
So long IBM, it was nice knowing you. Who would have thought Apple would out live IBM in the PC market? Didn't see that coming.
And neither Toshiba's nor IBM's machines run BSD/OS X/Linux as stylish as Apple!
See http://www.apple.com/legal/warranty/hardware.html
But IBM and Apple are both smart enough to realize that merging two companies with their own unique cultures is a difficult, sometimes impossible task. Bigger is not always better, as IBM learned during their dark years. A loose alliance based on mutual respect is likely far better for both companies.
Rumors about Apple mating with other companies have been around as long as the Mac has existed. Sun, Disney, Sony, IBM - I wonder who it'll be on the next iteration of the rumor mill.
Read the EFF's Fair Use FAQ
I love Thinkpads (I have 2 right now) but I won't buy a Levono Thinkpad.
What reasons do you have for that? You don't even know what they're going to be like. It's maybe a bit unfair to assume the ThinkPad standard will go backward under Lenovo. Or other reasons beside technical merits?
I, too, have wondered why Lenovo would pay so much for IBM's PC division. I expect we'll see a new logo almost immediately: most likely the current IBM logo with a small "powered by Lenovo" line underneath. In a few years, the logos will be reversed, with Lenovo's name as the more prominent one. Within five years, the logo will have no reference to IBM. This is the route IBM took with Lexmark when they spun them off.
I think the laptop market is nearing saturation in the U.S. A few years back, we thought the desktop PC would die off; laptops would become so inexpensive and so powerful that there would be no reason to purchase a desktop. That notion, however, has proved to be untrue.
With IBM holding nearly a 20 percent stake in Lenovo, it's likely that they'll provide them with whatever relevant IP they develop. That's they key. IBM will still be financially tied to Lenovo, so it's in both of their best interests to insure their laptops and PC's remain competitive. I wonder, though, if IBM might eventually sell off their portion of Lenovo.
An effective signature identifies a particular user amongst a base of thousands.
Why ever not? The Powerbook is *far* superior for running OS X. It is also much shinier and has the word "power" in it's name. No laptop in the world offers the same shiny, OS X running, 'power' in the name features as the Powerbook. This 'Thinkpad' of yours has *none* of these features. Bah! It is clear it is you who does not know what you are talking about. Good day sir.
I said 'Good Day' sir!
I take umbrage at that. You see, I used to work for IBM. I've had a number of ThinkPads over the years. I also currently own an Apple PowerBook. And I'd easily put this system in the same league as the ThinkPad (if not slightly higher -- where most modern ThinkPads are designed primarily as Windows systems, Apple's boxes are at least Unix based).
If you don't lock yourself into a specific architecture, you can see that Apple's PowerBooks easily rank up there with IBM's ThinkPads. Indeed, these are the only two companies for a very long time who have done any significant R&D into laptop usability. I'd pit my PowerBook against an Intel-based laptop any day.
In year one I imagine they'll use the IBM name. In year two they'll introduce some models under their own name in certain parts of the world. In years two through five they'll brand their systems under both the IBM and Lenovo names at the same time (ie: both logos on the boxes).
The idea being they'll wean their customers into thinking of their brand name as being equivalent to the IBM brand name. They have five years to do so -- an eternity in Internet time.
The questions becomes -- will it be successful, or will five years from now people be talking about the "good old days" when IBM made their PCs with quality and usability in mind.
Lenovo is buying a lot of expertise for their money in this area, so maybe they'll be able to pull it off. Or maybe not. Personally, I'm an Apple guy now for my laptops, so I couldn't really care less :).
Yaz.
This seems to me, as a long time Thinkpad owner to be sad. IBM always used to produce the best products by a large margin, but the quality seems to be falling already. For example, they've lost the confidence to ship their best trackpoint configuration - one is compelled to purchase a laptop including the ghastful touchpad, and with the buttons in a row rather than 2+1 (therefore making it impossible to have both emulated 3rd button + emulated scroll wheel).
But will the new company take over all of the leased buildings that IBM has in RTP...what about all the contractors (IBM's workforce is made up of about 80-90% contractors)...what about IGS...IGS currently does work for PSG (specifically on the web site front...most of that has moved to IBM India now...but Lenovo will obviously have their own web team...
Think of it this way...another company has just bought your division...are you going to tell all of your employees that their jobs may be in jeopardy and potentially loose the deal by having a mass exodus of talent as well as all of the bad press it would generate...
And IBM being made up of mostly contractors is exactly how this will pan out. In the news, IBM won't be laying off thousands of employees, it will be companies like Ciber and CTG...And it won't even be that way...IBM and Lenovo will simply not renew contracts...contracts are all temporary...regardless of anything that anyone at IBM would have you belive...
And yet, Dell's tech support is in India, whereas IBM's tech support is in the US. Hmm...
Condemnant quod non intellegunt.
Why does the Chinese ownership of the company matter, as long as the products have the same quality and support that IBM provided ?
Saying the products won't be the same quality just because the company is Chinese owned is like saying all terrorists are Arabs ... which suggests that Timothy McVeigh must have been one of those rare albino Arabs.
The Internet's nature is peer to peer - 20050301_cs_profs.pdf
IBM is a bit of a curate's egg. IBM global services suck ass royally in every conceivable way, but IBM hardware is actually Very Good Indeed - right down to desktop/laptop components. Sure, they all look like they were designed by Darth Vader on an off day but build quality is excellent, and their service is second to none - we've had field users from the UK out in Eastern Europe with a dying Thinkpad, and the UK warranty's covered them getting it fixed abroad by an IBM tech.
We were using their S50 desktops recently and discovered a bug relating to serial comms: their technical third line guys WROTE US A NEW BIOS UPDATE within a week to fix the problem after we sent them a sample peripheral we were having trouble with.
It's a little like HP selling off the printer business: you can't help feeling they're getting rid of some of the things they do best, leaving just service industry components of their business behind.
[rant] I agree. I've read most of the posts on this story and most are ignorant accusations that Lenovo will bring down the quality of IBM products....because OMG! they're a CHINESE company.
Yet, if most of these posters took a look under and inside their laptops and even PCs (even the ones with "IBM" stamped on them) they'll likely find big fat "Made in China" stickers.
Folks, China is already the "factory of the world" and for far more than just toys and cloths. Update your mental databases. It's no longer 1980. Toys, apliances, electronics, PCs, car parts, partially assembled automotive units (i.e. suspension) and a host of things you use are made in China and will increasingly be so. In fact, it won't be long (if not already) before many of the cars you drive are entirely built there.
Being that most people who rant about Chinese quality tend to be 'Merkuns it's rather ironic considering the track record of U.S. manufacturing quality (particularly large corporations). Even Korea's Hyundai has surpassed the big 3 automakers in quality. Remember Hyundai? [/rant]
I know that if I paid a premium to buy a genuine IBM ThinkPad in 3 or 4 years time, I'd be mightily annoyed to discover it's actually a Levono product that has nothing to do with IBM.
IBM might be allowing Levono to use the names, but will consumers and the courts allow it too?
A pizza of radius z and thickness a has a volume of pi z z a