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."
I only buy thinkpads for my own use... I like em better than anything else and they've been very stable and durable for me.
I'm not anti-social, I'm anti-idiot.
Yeah, they are only an extremely distant third to Dell and Compaq. Their Power5-based servers are proving to be extremely profitable. And the IBM CPU based game consoles coming up will help matters greatly.
If you don't understand any of my sayings, come to me in private and I shall take you in my German mouth.
The most interesting bizarre theory behind some of this was posed at The Register. They claim that IBM may be interested in buying or allying with Apple. It makes some sense, Apple are certainly one of the big vendors for IBM's Power chips, and it would give them a nice UNIX desktop to push, while giving Apple a little more "corporate credibility" and give them a chance to creep into the business desktop market more.
Realistically though, I just don't quite see it. I don't think Apple could quite take the image hit that being owned by IBM would entail, nor do I think the gains would really suit IBM that well. Perhaps some sort of closer alliance may result, but I would expect that to be about as far as things go. Still, and interesting but of completely wild speculation.
Jedidiah.
Craft Beer Programming T-shirts
I am posistive the design will stay the same. I have a first generation thinkpad and its identical to the new ones except its about 2 inches thicker. The same parts will go in and the same subtle changes like the improved trackpoint will appear. The only think this will cause is lower prices. I understand the jacked up prices on desktops servers but the thinkpads need to come down a little. With Leveno in charge maybe they will design the ultimate HOME laptop like every other company out there, IBM has kept the line too business oriented. Give me my 128mb Graphics Thinkpad! (I need to play warcraft in various locations lol) I currently play on a dell inspiron 1100 with 64 mb shared, 256 total in machine and a 2ghz celeron processor. Long story short its slowly making me sterile its sooo hot. Thinkpads are always nice a cool, well more cool anyway. Ill stop rambling now.
I can see how this will put IBM in quite a different position with regards to its relationship with Microsoft... while I'm sure that their x86 servers will still be available with Windows, we're looking at a completely different scale of total revenue IBM will be "forced" into with Microsoft, and perhaps an ability to wean themselves off Windows and focus more on AIX and Novell (err, I mean SuSE) Linux.
500GB of disk, 5TB of transfer, $5.95/mo
With the Dragon chip
Slashdot: News for Nerds, Stuff that matters only to them
Buy Apple stock now.
IBM is now fully committed to the PowerPC platform.
I have a ThinkPad T40p. One day, I dumped a whole glass of water on it. The ThinkPad kept running. I turned it off and removed the battery and disassembled it to dry it out. That's when I realized that the ThinkPad had designed-in channels for liquid to flow. It avoids any of the sensitive parts. I just used some paper towels to dab out the water, and let the keyboard dry. Powered it on and it worked like a champ.
Actually, upon closely RTFA, they *bought* the Think trademarks -- "ThinkPad" is now theirs. But they can use "IBM" on them for five years before they have to start calling them something else. I'd bet $500 easy that the name of the company becomes "Think" or "ThinkPad" or some derivitive name w/i the five years.
Dude, I think I can see my house from here.
I honestly don't think this has anything to do with merging with Apple (a stupid rumour) or for that matter, even leveraging Linux over Windows. It's really just shedding an expensive division, saving money and increasing profitability.
It's explained within the first page of the article:
"If it goes through, the deal would allow IBM to continue its shift from selling so-called commodity products toward selling services, software and high-end computers. Although it helped make PCs a global phenomenon, IBM makes little profit from PCs and often loses money, despite the fact that it's an $11 billion business for the company."
IBM's profits come from consulting and integration services, not from selling desktop machines. The price of Windows, Linux or otherwise, or what strategy they push on the desktop is not a big deal in this case.
What I think it comes down to is they're holding onto a division that is building commodity boxes and that's a tough game with competition like Dell. With ODM's and OEM's doing more and more of the design work these days, really all IBM needs is to pitch the stuff, which isn't affected by the sale of this division. The consulting and sales groups already push the hardware in major deals.
If you read the article, the market is slowing:
"That period will see average annual unit shipments slow to 5.7 percent and revenue growth subside to 2 percent, Gartner predicted."
Hence, you're not going to see any more profits from an area which already has razor thin margins. Give the business to the Chinese, since they know how to reduce costs. The biggest problem Asian manufacturers have today is not engineering skill or manufacturing capability. It's branding and marketing. Lenovo bought the IBM brand for five years and it's worth every penny.
It's pretty obvious the American part of the company will be cut, probably because they're expensive:
"It is going to take quite a long time to consummate, and the only way I see this running properly is that if a lot of blood is shed at IBM PC."
The desktops are already made and built by a Chinese firm (as noted in the article) while the money in laptops is made by large corporate sales contracts, not individual units.
In the end, I think it's just getting rid of an unprofitable part of the business, not some super strategic technology move.
Don't believe me? Go and have a look at the detail in the dinky cars your kid plays with and then compare that with the ones you played with as a kid.
More importantly, observer the radiator and the doors. You'll know what I am talking about.
PS Not trying to be racist here, just giving an observation over how saving a little money here and there really hits on things ultimately.
Where's my free iPod!? Until then, I'll settle for a kiss...
Sigh. There's a difference between made in China and designed in China. IBM notebooks have (for the most part) been designed in the US; coincidentally, they are also the most reliable notebooks on the market. Hmm...
Condemnant quod non intellegunt.
I can't believe this crap got modded insightful. It's quite clear that Alomex has no personal experience whatsoever with Lenovo. Lenovo (Legend, Lianxiang) is a very high quality company, that has managed to essentially monopolize much of Asia's laptop and desktop PC market for quite sometime now.
The reason you don't know much about them if you live outside of the greater China area is not because they're of poor quality, it's because the guy who runs the company has his head screwed on straight. I saw a very interesting interview with him when I was in Hong Kong a few months ago, where he was asked if he was going to take his products global. He said that it was definitely on his mind, but that he wanted to develop a strong lead in China, which he perceives as the 21st century's major market, before moving into Europe and the US.
Lenovo laptops are of high quality make and are priced very competitively. They're very widely regarded here (Shanghai) and my personal experience with them is that they're put together very well, better than say, Sony laptops.
The Chairman Mao dig is just about the stupidest thing I've ever heard. All it does is demonstrate that Alomex has never been to China and knows diddly squat about it (and if that's not the case, then he's a troll, plain and simple.) Chairman Mao has essentially no credibility in China (which isn't surprising at all) and while the CCP may continue to give him face in certain respects (it's not considered polite to speak ill of the dead here) any marketing rep worth his snuff knows that it's absolute suicide to try to connect your product with Mao and come out on top. The common people (especially in the demographic that buys computers) were mostly pretty badly burnt by the Cultural revolution and as that wasn't very long ago it remains fresh in people's minds.
China is, at this point, anything but communist. Anyone that makes this accusation is just showing himself to be a bubbling moron.
Lenovo, in particular, is not a state owned company (there are very few of these anymore, and the Chinese government is dumping them/privatizing them as quickly as they possibly can), it's profitable, successful, and international.
With their local connections, they will do well. I own a Thinkpad X40 and I personally am not at all concerned that quality will drop. Thinkpads are expensive machines, and if Lenovo keeps them at their current price, they'll be able to make an absolute crapload of money without dropping the quality at all, based on their current offerings.
This China trolling from desperate Americans worried about losing their economic and technological dominance in the near future needs to stop. I'm American, and let me tell you, no amount of whining is going to stop the PRC. The sleeping dragon is waking and the world, as Napoleon predicted, is trembling.
Wait a sec, what's this sticker on my 12" Al Powerbook? And its battery, and the power adapter, and -gasp- the VGA dongle!?
"Designed in Cupertino. Made in China"
Not sure where you are pulling your numbers from, but if you check http://finance.yahoo.com/q/is?s=IBM&annual and http://finance.yahoo.com/q/is?s=MSFT&annual and look at the most recent annual report, IBM had much more revenue ($89 bil vs $37 bil), and slightly more gross profit ($33 bil vs $30 bil), but lower net income ($7.6 bil vs $8.2 bil) meaning that MSFT's margins are much higher.
I'll chime in, my powerbook has gone through 3 power supplies; one actually shorted on the DC line because of the cheap wire thus melting the whole device in a characteristic smelly (toxic?) plume. The battery pack latch of the same powerbook weared off causing it to jam if certain precautions aren't taken. The DVD drive sometimes makes some nasty noises, likely the full-stroke sensor doesn't work and the stepper motor to laser caddy gear skips; it hasn't given the ghost yet but I'm wary of Warner DVDs that tend to trigger this behaviour. Unfortunately the fans are starting to make funny noises. It doesn't suffer from flaky paint but other do and let's not forget the logic board fusses on the iBook and the battery problems of the Al powerbooks. Granted, it'll be 2 years old in 2 weeks and I still enjoy it as the first day (try that on a w2k Dell!) but powerbooks aren't some mithical Andruil, just another mass produced device.
Now, to be on topic: all these problems can be eventually reduced to lapses in an otherwise good quality control process; certainly better than Dell's or Medion's but still improvable. Now, I'm not saying that it's the chineses' fault, I've seen western made gsm phones crap out like flies (and don't forget good 'ol crappy FIAT... I'm italian, I see these poor jokes every day) but sometimes they do cut a corner too much over there...
Unfortunately my father's 40 yrs old AKAI amp was built with other quality standards in mind. Today it would be overkill to embed such high durability in products we have accustomed to consider consumables; this point is important and it's both our fault and the corps'. We, as consumers, enjoy a continuous turnover of our toys and them, the corps, are quite happy to make products that "help us" take the decision it's time to buy a new one.
Back on my unlucky powerbook... the power brick... what fool would save the 1 cent for a short guard and get to change, free of charge, thousands of blown supplies? This is a design flaw, a mistake done in Cupertino... shure, the cheap chinese cable is the initial cause, but Apple could have reconditioned rather than landfilling if not for the missing transistor (no, not a fuse, just a transistor wired up to shut down the supply if the draw is too high...), tsk... tsk...
Mi domando chi à il mandante di tutte le cazzate che faccio - Altan
"It's been a long time since our leading competitors actually made a computer," he said. "They have outsourced manufacturing computers a long time ago, but Dell continues to invest heavily in the manufacturing and design of computers."
I find this enormously funny.
Dell-speak translation:
IBM designs their own computers, and builds many of the parts, but has others actually assemble the parts. Dell finds people who build design and build computers and parts (often IBM, in fact), buys the parts and designs ("investing...") and then assembles them into a computer. The places where Dell "invests" in the design is in a snazzy Dell bezelplate, or shrinking the printer cartridge size to better rip off the consumer.
"It's been a long time since our leading competitors actually made a computer"
Last time I cracked open a Dell it was when my daughter accidentally dumped Progresso Chicken Noodle Soup into her keyboard. I found standoffs and little plastic parts Superglued in place on her ostensibly new Dell LT.
Ever since then I've taken Dell computer assembly practices with a HUGE grain of salt.
Mit der Dummheit kämpfen Götter selbst vergebens.
Once the dollar collapses the rest of the way we'll have to manufacture our own stuff again anyway, since we won't be able to afford China's (Mexico's or [insert job siphoning foriegn country]) at that point. It will be cheaper to build it here again.
As the dollar falls, so will the value of the debt China holds, and as it does, the price of goods manufactured in other countries, including China, will spiral upward out of control.
I'd consider making your electronic purchases for the next 5-10 years in the very near future folks...
I'm not worried about losing our technical dominance. With increased technology export controls about to become very thoroughly enforced, and the falling dollar, combined the two should make offshoring stuff a little less lucrative for both manufacturing and technology.
The falling dollar is just the first sign that the US trade, labor, and debt issues are in the process of fixing themselves. I just hope China's banking system can handle the inevitable losses on their T-Bills and other investments. Their manufacturing sector would be impacted rather severely if the banks didn't have the money to finance them because of devalued debt owed by the US.
Hopefully the resulting economic depression won't last as long as the last one. We have been living on borrowed time since before the Carter years. When it catches up with us it won't be pretty.
l8,
AC
I'm not exactly sure how Chrysler handled their plants after the merger with Daimler. Mercedes plants located in the US were non-union, but Chrysler was prohibited by their union shops to run non-union shops.
I'm not against unions overall, but there are many industries where unions are not necessary anymore. Unions were originally created to keep workers from working extra long hours or overly dangerous jobs for nearly no pay. There are jobs that still need unions since they generally get paid dirt for professional level work. And then there's the police who probably need a union, but can't have one. Auto workers on the other hand, work to quota and stand around the rest of the day and in some cases get profit sharing no matter the quality of the work they produce.
Be glad life is unfair, otherwise we'd deserve all this.