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."

Comments

Apex buys Sony next?

[Fubar411]

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.

Re:Quality

[liangzai]

Try http://www.lenovogrp.com/ (or http://www.lenovo.cn/ if you know Chinese). I think Thinkpad and other IBM gadgets will decrease as much in quality under Lenovo as Volvo has decreased in quality under Ford's oppressive measures (or Saab has under GM's). It's just a transaction of money, estate and control, the quality will depend on wise management, regardless where the production is.

Freedom from MS

[bstadil]

The main thing IBM is getting is freedom from Microsoft. As long as they had the PC line they couldn't totally piss off MS as they could raise the price on Windows to the Normal level. (MS have done this once)

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

Re:Freedom from MS

[T-Ranger]

This is a question of debate, and perspective. MSFT has a higher market cap then does IBM. But for virtually any other business metric, IBM is on top. More revenue, more profit, more employees, more locations. Bigger IP porfolio. Far, far, more lines of products.

In the desktop PC world, Microsoft may be able to push around anyone, including IBM. Anywhere else, IBM is king. This whole sale is due to the very low margins on desktop PCs, I read somewhere it only brought in about $75mil/year in profits -- far to little for IBM to bother with. If IBM starts a serious Linux push -- they already have the technology in place, just marketing time now (.. the same OS, on your departmental server to your mainframe, backed by IBM...) then they would undoubtably piss of Microsoft. And that very slim margin could evaporate overnight.

Re:Get a Gateway

[Trackster]

[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]