IBM Sells Point-Of-Sale Business To Toshiba

ErichTheRed writes "Yet another move by IBM out of end-user hardware, Toshiba will be buying IBM's retail point-of-sale systems business for $850M. Is it really a good idea for a company defined by good (and in this case, high-margin) hardware to sell it off in favor of nebulous consulting stuff? 'Like IBM's spin-offs of its PC, high-end printer, and disk drive manufacturing businesses to Lenovo, Ricoh, and Hitachi respectively in the past decade, IBM is not just selling off the RSS division but creating a holding company where it will have a stake initially but which it will eventually sell.' Is there really no money in hardware anymore? "

Comments

So much for quality.

[sethstorm]

As it has done with Lenovo and the other manufacturers, the quality will decline.

Re:So much for quality.

[Sir_Sri]

isn't that why they're selling? The premium for IBM quality isn't justified or isn't sufficiently profitable anymore, and IBM wants the IBM brand to remain premium. So you sell off any non premium divisions to other people.

From the perspective of IBM no one should ever be fired for buying an IBM. That may mean you have an 80% markup on some things to make sure it's going to work and you can support it if it doesn't. But it damn well better work. If you can't justify that price or can't make it work sell the business and move on to something else.

Of course there's money in hardware

[Anonymous Coward]

This is why they have a buyer.

But their consultants will look more honest when they go out shilling Toshibas POS systems, and they still have their slice of the pie. They wont be baking it, just slicing and serving.

Re:Of course there's money in hardware

[TWX]

The next main-trunk comment below this one explains it very well. IBM may not have their name on the product anymore, but they will undoubtedly still have a heavy hand in it, and the risk gets put off on the new owner.

IBM made mostly good stuff, though I still don't care for their Lexmark printers nowadays. Otherwise, they could do well if they're shilling whatever hardware they need to push, not just their own.

There is a lot of money in hardware

[ilotgov]

In my opinion there is a lot of money in hardware. Something else is wanting in most of Europe and perhaps North America. The will and enthusiasm to work physically with ones hands. And hardware is at the bottom line a physical thing.
We tend to talk about cheep labor, an expression which degrades labor in general when used so often. And so we end up with a lot of decision makers and wall-streeters who have no regard for physical things in general. Decisions will be made in favor of offices instead factories and money will flow to offices instead of factories.
As we can see in the example of China (owning a large part of the US) there must be money in hardware.
Germany, as an exception to the rule, seems to do quit well producing hardware but in general it is below our dignity to make our hands dirty producing something and this is the reason hardware returns little money in our culture.

Re:Who knew

[lanner]

Because of smartphones and tablets. Or, more specifically, the miniaturization and commercialization of the components. It is the same reason you are seeing things like the Ecobee thermostat. The price of POS equipment is really high, but super-cheap commodity tablets could be used to replace almost all of that. You still need the cash drawer and some other accessories, but IBM has wisely seen that POS is being threatened by software replacements on tablets.

As an example, there is a hot dog stand that I go eat at once or twice a week and the guy takes credit cards via his iPhone and a Square CC reader. He has no POS gear. That's today. In ten years, those POS equipment vendors could be very disrupted by newcomers to that industry.

Re:Who knew

[TWX]

That's what came to my mind on gp's post. We are on our third AS400/i-Series, as we like the payroll for 10,000 employees to just always work, and the finance, purchasing, and inventory system for 200,000 tracked and probably 10,000,000 untracked assets to just work. We have probably quad-9 uptime reliability with the IBM, while our Microsoft boxes constantly have downtime.

Re:Who knew

[hairyfeet]

Well between those and units based off cheap PCs (which i see quite often as well) the days of POS being a high margin business are coming to an end and IBM knows it. from the looks of things the future will be small ARM and X86 based touch screens all made from commodity parts and as cheaply as possible.

Frankly this is a smart move unless IBM is willing to play in cutthroat markets which we've seen no indication of, I mean who know would have thought that IBM staying in PCs would have been a good idea when Dell and HP are making on average $8 a unit on the low end which is their biggest sellers? Surviving on scraps is just not something big blue cares to do so they are bailing while the bailing is good. If anything is shocking its the fact they got someone to pay that much money for their POS business.