Chinese PC Maker Looks to Buy IBM's PC Business 238
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."
Brand Recognition? (Score:2, Interesting)
I hope not (Score:4, Insightful)
Re:I hope not (Score:3, Insightful)
Quality control (Score:2)
Which one of those scenarios happens is up to the company that is having the hardware produced. IBM is definatly more the former. Their products are known to be quite high quality. If this Chinese manufacturer is all about cheap
Re:I hope not (Score:5, Interesting)
Re:I hope not (Score:2)
And that would be a bad thing?
Re:I hope not (Score:2, Informative)
No reg link (Score:2, Informative)
I am such a karma whore. O'wait, I dont even have a slashdot account. O'well.
Enjoy.
Trouble with a Capital "T" (Score:2, Insightful)
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.
Re:Trouble with a Capital "T" (Score:2, Interesting)
Re:Trouble with a Capital "T" (Score:2)
Re:Trouble with a Capital "T" (Score:2)
I think you've touched on a very important point. Most shareholders today don't care about the woking conditions of the employees. That's what OSHA is for, right? Well, what if that company only does the marketing for a product that is made oversees, which is NOT regulated by OSHA?
The bottom line is all too often blind to real life issues.
Re:Trouble with a Capital "T" (Score:3, Interesting)
These are the kind of jobs and businesses that need to stay in America.
See:
http://www.thejournalnews.com/newsroom/010902/09ib m.html in America. [thejournalnews.com]
The fact of the mater is any company can't run a business in the red indefinitly. And the date of this article suggests IBM has been bleading profits into the PC operations for some time.
And the web never forgets...
Re:Trouble with a Capital "T" (Score:2, Flamebait)
IBM is selling the proverbial noose that will strangle the West. Selling out our technological base to an entity owned partially by the Chinese government is a recipe for disaster. I know it sounds alarmist, but this is a recipe for long term catastrophe.
The US is becoming a third world country. IBM sells an entire division to China - now a Chinese firm becomes one of the top three world PC makers - and not just on cheap PCs, but near the top. Worse, IBM sells this firm its PC patents, manufacturing pr
Re:Trouble with a Capital "T" (Score:4, Insightful)
A lot of PCs and laptops are already assembled in Taiwan and China. Most of the parts in my PC were made in Asia. How is this a selling out of our technological base?
Re:Trouble with a Capital "T" (Score:5, Insightful)
Specific to this case, selling both the patents that IBM holds for PC manufacturing and selling IBM's legitamacy to an external agency.
And, to put it damn bluntly, all the parts in your PC (and my Mac laptop) made in Asia do sell out our technological base. But booyah, we've saved $100 bucks! What the hell is to stop these firms in Asia from realizing that hey, why make your machines for Dell or Apple when you can get the profit yourselves? Hey, even better, you can call it an IBM?!/p>
We transfer technology paid for by the US government (research, infrastructure) and US consumers (far higher prices, our taxes that pay for research and infrastructure) over to foreign countries - all so the wonderful benefits of "free trade" make everyone richer. Yet free trade means nothing more than cheaper labor and looser environmental standards, never noticing that we're undermining our own way of life.
Re:Trouble with a Capital "T" (Score:2)
btw, would you rather pay 10x the prices on consumer electronics?
undermining our own way of life (Score:2)
The world does not owe the west, and in particular the USA, a living.
Yes completely free trade is a Bad Thing, but your proposed alternative of attempting to keep all production/design in the United States is just not going to wash given the new econimic power of many Asian nations. Why should they accept an unequ
Re:undermining our own way of life (Score:2)
Re:Trouble with a Capital "T" (Score:2)
Re:Trouble with a Capital "T" (Score:2)
Re:Trouble with a Capital "T" (Score:2)
Because the research, the design, etc., ARE done in the USA, which is a big chunk of the money, and jobs.
Same thing goes for Intel, AMD, etc., while they may have much of their stuff made over-seas, that's all the low-margin stuff, while the high margin stuff is done in the USA.
Re:Trouble with a Capital "T" (Score:2)
No, that role entrusted to the government, and the vast majority of the population only looks at "moral issues" or "gun rights" or
Re:Trouble with a Capital "T" (Score:2)
Ha! I've been rated a troll! That's too funny. Someone obviously doesn't know that definition of a troll.
Brand Name (Score:2, Insightful)
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.
Moderate this comment
Negative: Offtopic [mithuro.com] Flamebait [mithuro.com] Troll [mithuro.com] R [mithuro.com]
Re:Brand Name (Score:2)
There's no need to keep the brand name.
They just need the ThinkPad trademark like Acer kept TI's product line it acquired in 90's (what was it - Extensa or something? Yes, it is Extensa - http://global.acer.com/about/news.asp?id=166)
And then they can make up some more Think names (ThinkDesk for PCs, ThinkPod for portable music players and so on and so on).
PC's will be the toy (Score:3, Funny)
Re:PC's will be the toy (Score:2)
Brand Name? (Score:3, Insightful)
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.
Improving Thinkpad security... (Score:2, Funny)
Let's face it: The Chineese have a huge lead in fingercuff technology. American fingercuffs aren't even close! If they leverage their cuff experience in the nextgen Thinkpad they might just have the 'next big thing' on their hands.
I heard EA has already pre-ordered!
End of an era (Score:5, Interesting)
As a matter of fact... (Score:2)
Re:End of an era (Score:2)
Re:End of an era (Score:2)
The IBM Standard allowed things like disk drives, video cards, and BIOS details to be interoperable, so you could actually take a disk from one PC and use it on a PC from a different vendor. This probably would have happened anyway in the early 80s with or without IBM.
What IBM did do is licence all of this technology pretty cheaply (~$5
Re:End of an era (Score:2)
Re:End of an era (Score:2)
I don't think so... (Score:2)
So LEgand gets a few factories, supply lines, existing customers and thats it.
Shakespeare .. (Score:2)
"A crappy PC maker by any other name is still as crappy"
PC's made in china? So What...... (Score:3, Insightful)
Re: (Score:2, Insightful)
Took me a little while, but I found it. (Score:2)
It's deja vu [slashdot.org]. Of particular interest is my post to that thread, titled leader vs follower business approach [slashdot.org]. It hasn't been mod'ed up over there, looks like I get another chance. I usually get modded up for posts I spend time on, hopefully I also will this time. Another chance; Yipee !
Sound business decision... (Score:5, Insightful)
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.
Re:Sound business decision... (Score:2)
while in the past this hasnt been true, these days apple's business model seems to be working pretty well (at least its gaining them back some marketshare and revenue).....
You say Aptiva, I say Ambra (Score:4, Interesting)
The article states the Ambra division was miss managed and had poor customer service, leading to it's closure just one year later in 1994. The division would later be resurected as the IBM "Aptiva" line of personal computers many more of us know today.
As a college student I was very pleased with the support I received for my Ambra (386 I believe). The monitor went bad and IBM had a new one waiting for me at my dorm within 24 hours of the service call. I was sad to see Ambra go.
You say Dividion, I say division (Score:2)
Dividion? Twice? That's one of the more creative examples of spelling I've seen it awhile. Bravo!
Re:You say Dividion, I say division (Score:2)
Damn... (Score:2)
Raise Reputation? No. (Score:2)
If they make cheap crap now, buying the rights to a quality name/product wont make them stop producing crap...
I hope IBM retains the ThinkPads at least...
Sad really.
Will we see AMD-based IBM PCs this way? (Score:4, Interesting)
Re:Will we see AMD-based IBM PCs this way? (Score:2)
IBM can't compete on the market... (Score:2, Interesting)
age old wisdom (Score:3, Funny)
Nobody ever got fired for buying IBM.
China's Pebble Beach? (Score:2)
Uh. (Score:2)
What would they get and how much would they have to pay for it?
Lenovo could use the same money to market their brand instead.
Acer lags in brand-recognition coz their computers used to be suckier than the rest (I don't know about now) and they weren't cheaper either.
Tons of US people buy Japanese cars. Now the Korean cars are gaining share.
Demand for cheaper PCs drives outsourcing/offshore (Score:2)
They were destroyed by lower price demands, and monopoly pressure tactics. What we see here is a cannibalization
Please don't kill the Japanese Thinkpad design lab (Score:2, Interesting)
Though my Thinkpad T40 was assembled in China, I understand that most, if not all, of the Thinkpad design came from your excellent Japanese lab. As far as I can say, your lab is one of the few that understands the balance between durability, usability and portability: Unlike Dell and HP ("bulky, heavy, suitable only for U.S. where people don't walk"), and unlike some Japanese makers ("make everything smaller, no matter how fragile it gets, and you have some unusable tiny keyboard as a bonus!"
Can't hold it back. (Score:4, Insightful)
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.
(3) Profit! (Score:2)
If the profit to be made making these computers is slim, why not sell that part of the business to a place with lower labour costs? They aren't selling the
Everything comes off the same assembly line (Score:2)
Re:IBM's Rep at stake (Score:5, Insightful)
Re:IBM's Rep at stake (Score:2)
Not so fast... (Score:2)
Re:IBM's Rep at stake (Score:3, Interesting)
china doesn't need to buy U.S. companies when it can buy the U.S. government (nakedly, in the form of debt, and more covertly, in the form of poltical contributions).
of course, you could say that (top) U.S. companies and the U.S. government are almost indistinguishable by now, and we'd both be right...
RTFM (Score:2, Insightful)
Part of IBM is smart; they're getting out of the hardware business and morphing into a service provider, where they can make big $$$. The stupid part of IBM (the mini/mainframe side) is still trying to charge $200k for an AS/400 --- sorry, "iServer" --- that is comparable to a $5k HP Linux box.
I guess if you're stuck with your Cobol program (Do you even have the s
Re:RTFM (Score:4, Insightful)
I don't think it'll happen though.. they're in too many service contracts and having a hardware division in house makes much more sense than trying to procur another vendor's equipment and supporting it while maintaining their level of service. Think of all the government and business contracts that outsource to IBM who in turn provides the hardware, software, and people to make their business work. IBM would be essentially saying "well, we're going to buy generic white box PCs from China instead of supplying our quality systems from now on." Pooof, they'd lose all their federal government contracts overnight as they find someone that supports HP or Dell.
Re:RTFM (Score:2)
Re:RTGPP (grandparent post) (Score:2, Insightful)
Part of IBM is smart; they're getting out of the hardware business and morphing into a service provider, where they can make big $$$. 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
Re:RTGPP (grandparent post) (Score:2)
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.
Except that there are a number of server di
Re:RTGPP (grandparent post) (Score:2)
AS/400 machines are minicomputers, not mainframes. They are also quite competetive on the market, and have been around for almost 20 years.
zSeries: IIRC, what was the S/390. Anyone care to confirm?
Those are mainframes, and are currently some of the fastest machines money can by. Want a mainframe with several hundred processors and a several hundred gigs of r
Re:RTGPP (grandparent post) (Score:2, Insightful)
> 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.
Re: RTFA (Score:2, Insightful)
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". A
Re:RTFM (Score:4, Insightful)
I just looked on the bottom of my Thinkpad. It sings to me these words: "Manufactured for IBM Corperation; Armonk New York, USA; Made In China". Where was that point you were making? I can't seem to find it.
Re:RTFM (Score:2)
1. The point, as it says in the guy's post, is that Legend makes crappy products so Legend ThinkPads would crap out in a year or two.
2. China is a country, not a division of Legend Inc. or something like that.
3. I am quite certain that low-end (if not all) IBM ThinkPad models are manufactured by LG
Re:RTFM (Score:2)
Re:RTFM (Score:5, Insightful)
I know what you're actually saying, but: if you're IBM and you're selling a $5k machine for $200k and can find 700,000 people a year [computerweekly.com] who will buy it, that sounds pretty damn smart to me.
Re:RTFM (Score:2)
No, it's going nowhere soon. The migration costs are simply too high, much higher than the markup on the hardware.
Re:RTFM (Score:2)
Traditionally that "stupid part" is where IBM made all of it's money. (Although the Stupids are the customers, not IBM.)
My guess is that a huge chunk of IBM's Services revenue actually comes from servicing their Mainframe/Mini platforms, moreso than from $5K Linux boxes. So, its sort of an accounting trick -- take traditional proprietary platform
Re:IBM's Rep at stake (Score:5, Informative)
I don't know that IBM selling out entirely is a foregone conclusion. There's an article by the Register [theregister.co.uk] that speculates what's being negotiated is more likely a joint venture than a buyout. Which makes sense. IBM would still be able to maintain control of the branding in that case.
Re:IBM's Rep at stake (Score:4, Insightful)
More Issues:Worker's Rights &Environment at Le (Score:2, Interesting)
A side issue is the sale of sensitive technology to Le
Re:More Issues:Worker's Rights &Environment at (Score:2)
Re:More Issues:Worker's Rights &Environment at (Score:2)
oooh, they both have "finger mice" - you mean pointing sticks? whooopidity do, who cares, that's not a reason for buying another company's PC division.
corporate social responsibility? open your eyes. no such thing exists.
in any case, that's no reason why lenevo can't have ibm's pc division. western culture has expanded far enough. quit with your quest for world domination.
-mike
Re:Agreed. No CSR in China. (Score:2)
get real. most companies do that sort of thing for advertising purposes. give a chunk of change here and become a "platinum sponsor" and get your name in bigger letters than all the other sponsors!
there is no such thing as corporate social responsibility. corporations, for the most part, are out to fuck consumers over. there are some, i'm sure, that have some measure of soc
How many critics have even seen a Lenovo computer? (Score:2)
Two things to remember: Lenovo is a Chinese firm and largely avoids paying the Windows tax. The extreme competition in computer assembly (the company *is* undercut by small businesses) suggests it lacks the ability to truly abuse workers in the sense of paying them below market wages.
FWIW, I work in China and would have bought a Lenovo for my last laptop, but needed
Re:More Issues:Worker's Rights &Environment at (Score:2, Insightful)
Because americans aren't the most polluting populace in the world?
IBM is INTERNATIONAL (Score:4, Insightful)
Re:IBM is INTERNATIONAL (Score:5, Insightful)
Maybe you also missed the part of global economics where practically all the products consumed in England were made in the USA, for decades. You even have the obtusity to say that a Chinese company (by definition, part of the Communist mafia government) buying IBM's PC business has "nothing to do with commercial empires". The only accurate line in your entire post is "I think not". When you say that, I can't help but agree.
Re:IBM is INTERNATIONAL (Score:3, Insightful)
Re:IBM is INTERNATIONAL (Score:2)
Re:IBM is INTERNATIONAL (Score:4, Insightful)
I have "some issues with the US". I'm American; it's my responsibility to "have issues with the US". I have issues with Anonymous Cowards, too, who post nonsense about Japan and Korea erecting a flimsy barrier to a China that can threaten the US industrial hegemony. I'm sure you're quoting from some "Conservative" talking point, justifying the rearmament of Japan and Korea to get a bigger cut of their economies poured into the global arms business that has become the primary US industry. Well, until you demonstrate an iota of geopolitical or global economic awareness, don't expect me to bother translating your empty words into something to debunk.
Re:IBM is INTERNATIONAL (Score:2)
Re:IBM's Rep at stake (Score:2)
IBM is international (Score:3, Informative)
Re:IBM's Rep at stake (Score:2, Interesting)
They very well may not market them using the IBM name and logo, but rather simply market them as IBM's desktop solution. After all, IBM did scrapped its NetVista thin client line and started selling thin clients from Neoware [ibm.com]. It's been done before.
I wonder, since the only place left for Intel chips at IBM will likely be in low-end servers, will IBM create a low-end PowerPC chip to compete with Wintel at some point?
Re:IBM's Rep at stake (Score:3, Informative)
IBM's QC Standards (Score:2)
Re:I'm sorry. (Score:3, Funny)
Re:A moment of silence... (Score:2)
But if the only built-in pointing device is a trackpoint, there's no way that I will buy one.
I've never been able to make any kind of a curved path with a trackpoint: I either get a straight line, or some nasty zig-zag. And do you know why? Because there's no feedback. It's the same reason that the flat membrane keyboards on the Atari 400 and the Timex Sinclair sucked: there was no direct feedback to your fingers as to whether or n
Re:A moment of silence... (Score:2)
Desktops too (Score:2)