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IBM Businesses The Almighty Buck

Going, Going, Gone: IBM Sells PC Group To Lenovo 576

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."
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Going, Going, Gone: IBM Sells PC Group To Lenovo

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  • by omarius ( 52253 ) <omar@@@allwrong...com> on Tuesday December 07, 2004 @11:23PM (#11028176) Homepage Journal
    That's a damn expensive IBM PC unit. The clones are a lot cheaper, people.
    • Gateway (NYSE GTW) Has a market cap of 2.4B, so IBM's PC business at 1.75B is cheaper.


      I don't think of Gateway, Dell, Toshiba, Sony, or any other name brand as a "clone" anymore, and that's the problem - everyone else thinks of them as name brands too.


      All my desktops are white-box pc's that I built myself - now that is a clone (although, oddly all the components are themselves name brand... hmmm).

    • Re:Get a Gateway (Score:2, Insightful)

      by badasscat ( 563442 )
      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 the
      • Re:Get a Gateway (Score:3, Insightful)

        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.
        • Re:Get a Gateway (Score:3, Insightful)

          by phrasebook ( 740834 )
          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?
          • Re:Get a Gateway (Score:4, Informative)

            by BoomerSooner ( 308737 ) on Wednesday December 08, 2004 @12:39AM (#11028866) Homepage Journal
            The better safe than sorry reason. Paying a premium for a laptop isn't a problem. Paying a premium for an unknown item is not a good choice. I guess that is what I get for working in risk management.

            When I worked at Andersen they used Compaq and IBM laptops. I got lucky and got an IBM. The compaqs were breaking so often that they were switching completely to IBM (then they fucked up and got shut down!).
          • Re:Get a Gateway (Score:3, Interesting)

            by dextroz ( 808012 )
            If you've bought other stuff in the US - especially plastic and 'die-cast' metal good in the US - most of them are (coincidentally) Chinese made and are chintzy compared to what you'd have got 20 years ago.

            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 observatio

            • Re:Get a Gateway (Score:3, Interesting)

              by Txiasaeia ( 581598 )
              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...
          • Re:Get a Gateway (Score:5, Insightful)

            by Trackster ( 761525 ) on Wednesday December 08, 2004 @07:01AM (#11030502) Journal
            [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]
        • Yeah no doubt. Forget that Chinese plastic crap...

          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"

          • 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
      • by Anonymous Coward on Wednesday December 08, 2004 @12:31AM (#11028806)
        Uh, what? They didn't buy a PC, they bought a whole PC Business.
        *------- Joke.

        O ----- You.
        -|-
        /\
      • Re:Get a Gateway (Score:3, Insightful)

        by jm92956n ( 758515 )
        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 th
        • 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 deskt
      • Re:Get a Gateway (Score:5, Insightful)

        by Yaztromo ( 655250 ) on Wednesday December 08, 2004 @12:47AM (#11028934) Homepage Journal
        (don't even bring up Apple, people - if you do, you have no idea what you're talking about)

        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.

        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?

        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.

        • Re:Get a Gateway (Score:3, Informative)

          by bshensky ( 110723 )
          I don't know about you, but I currently own a Thinkpad T22 and a Powerbook 17". Plus, I've owned 2 other Thinkpads over the last 7 years.

          Quite frankly, my preferences between the two come down to this:

          (1) The Powerbook is the better Road Warrior, with better overall thoughtful packaging. I'm productively running all different pieces of Oracle on PPC/OSX, BSD/Unix and Wintel in that square foot. And you really can't underestimate the WOW factor of that snazzy case!

          (2) There will NEVER be another notebo
  • Reuter's story (Score:5, Informative)

    by wyldeone ( 785673 ) on Tuesday December 07, 2004 @11:26PM (#11028202) Homepage Journal
    Reuter's story on this is here [reuters.com].
    • Re:Reuter's story (Score:2, Informative)

      by Anonymous Coward
      Dell is slamming this sale. Here's the article:

      Dell slams expected IBM-Lenovo deal [arnnet.com.au]

      Here is a quote I love from the article:

      Dell attributed his competitors' problems to outsourcing.

      "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."

      At least Dell doesn't think outsourcing is all it's cracked up to be. Even seems to think
      • Re:Reuter's story (Score:5, Insightful)

        by Txiasaeia ( 581598 ) on Wednesday December 08, 2004 @01:35AM (#11029229)
        "At least Dell doesn't think outsourcing is all it's cracked up to be. Even seems to think it caused IBM's downfall in the market was because of this."

        And yet, Dell's tech support is in India, whereas IBM's tech support is in the US. Hmm...

        • Re:Reuter's story (Score:3, Informative)

          by Skuld-Chan ( 302449 )
          Actually IBM has a lot of call centers in both countries - do a search on google and you'll find plenty of articles like this one > http://www.technewsworld.com/story/33346.html [technewsworld.com].

          IBM doesn't just run call centers for their tech support on their own products. They used to do all the helpdesk support for Nortel a long time ago for instance (note: I only know this because while working at Stream for a totally different contract a customer incisted I stay on the line while they call their help desk involving
      • "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
  • Quality (Score:2, Insightful)

    by splitretina ( 706377 )
    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.
    • Re:Quality (Score:5, Insightful)

      by liangzai ( 837960 ) on Tuesday December 07, 2004 @11:34PM (#11028300) Homepage
      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.
      • Re:Quality (Score:3, Insightful)

        by ilyanep ( 823855 )
        I can make another metaphor : Symantec has definately killed Norton. The suite they offer now (2005) stinks, but I want to avoid going into too much detail.

        Aside from being chinese (no offense to any out there), Lenovo is a different company which doesn't share the original company's viewpoints. This has happened time and time again, this won't be an exception.
        • Re:Quality (Score:3, Insightful)

          by metlin ( 258108 ) *
          You know, we have folks from NASA who frequently give presentations on various cool technology stuff and the like.

          I noticed that in all the shuttlecraft/space station pics, the systems used for controlling various things were all IBM laptops.

          ThinkPads all the way, no question. I asked the guy about it and his response was, "It's robust, it's reliable and it's IBM".

          I'm quite certain that Lenova couldn't *ever* have that kind of a brand-name.

          IBM has grown to earn the respect, and while Lenova may buy IBM'
      • Re:Quality (Score:5, Funny)

        by UniverseIsADoughnut ( 170909 ) on Tuesday December 07, 2004 @11:48PM (#11028430)
        "I think Thinkpad and other IBM gadgets will decrease as much in quality under Lenovo as Volvo has decreased in quality under Ford's"

        So quality is going to go massively up, and the computers will become very trendy and liked instead of mocked by the masses? Sales will increase, and people won't think of their products as boxes anymore.

        Gee this is horrible.
    • Re:Quality (Score:3, Insightful)

      by quarkscat ( 697644 )
      This story reminds me (okay, so I am long in
      tooth) of Kaypro (back in the day). They
      announced a new "transportable" with a lot of
      cool new features way too early -- it destroyed
      their current H/W sales as people held onto
      their money until the new products arrived.
      The drop in sales destroyed the company.

      I can imagine that corporate buyers are either
      rushing to purchase the last remaining stock
      of IBM's laptops & workstations, or are quietly
      kicking themselves for believing that old adage
      that "nobody gets fi
  • Does the PC sell include workstations? I have been looking for information but all I hear is PC. The loss of the Thinkpad is terible though, IBM was the only comany I know that made a damn decent laptop which would physically last more than 3 years.
  • by Fubar411 ( 562908 ) on Tuesday December 07, 2004 @11:28PM (#11028229)
    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.
    • by anactofgod ( 68756 ) on Tuesday December 07, 2004 @11:55PM (#11028506)
      Odd already are that the laptop you are typign on was not manufactured by IBM, but by some contract manufacturer in Asia. IBM has been divesting itself of PC and laptop manufacturing facilities for quite a while now.

      In fact, if one actually read the article, one would see that point being made in...oh...about the thirteenth paragraph. One would also realize that, inspite of the headline and /. synopsis, it's not an actual "sale" of the PC unit. IBM is forming a joint venture with Lenovo, which means that IBM will continue to be involved in the PCs and Thinkpad business for at least a few years.
    • by UniverseIsADoughnut ( 170909 ) on Tuesday December 07, 2004 @11:58PM (#11028526)
      I think you are looking at this wrong like so many others. They bought IBMs PC devision, that will Lenovo will basicly become IBM PC devision. They will take up the quality IBM has, not bring down IBMs quality.

      They did this to gain all the quality. Besides things like thinkpads arn't even designed much by IBM, it's some asian company that makes them for most everyone else.

      I expect them to be much like when IBM spun off the printer devision which became lexmark. Lenovo will re-orginize, probably just scrap much of what they had. Probably rename under a new catchy name, and grow to be a big time player. People just don't think IBM when it comes to home computers anymore. They will go after that again which IBM has long since ditched.

      I guess thing will now be listed as "Lenovo Compatible"

      • by shanen ( 462549 ) on Wednesday December 08, 2004 @12:15AM (#11028682) Homepage Journal
        No, the manufacturing of ThinkPads is distributed to various companies (though I think some are made in Japan), but all of the design has been done in Japan up to now. Certain subsystems have drawn on work done elsewhere, mostly research, but the designs and testing are done here (since I'm located in that selfsame part of Japan).

        Anyway, it's a funny world. Low-margin commodity businesses are good for the people and companies that get to buy the cheap commodities, but bad for the companies that have to produce the commodities and suffer from the competition. Stock price uber alles, you know.

        However once someone gains solid control of the commodity market, then heaven help everyone, but that's long-term thinking, and very out of fashion.

    • by Lariano ( 822949 ) on Wednesday December 08, 2004 @01:21AM (#11029144)
      The hard drives in the ThinkPad have for the last year been manufactured by another department IBM sold off, now called Hitachi Global Storage Technologies http://www.hitachigst.com/ [hitachigst.com]. These are and will continue to be developed independently from anything Lenovo does, and it's more than likely that Lenovo will continue using these hard drives. So the Lenovo ThinkPads should support about the same falling distances as the ones by IBM.
  • PS/2 (Score:2, Funny)

    by m93 ( 684512 )
    Gee, I guess that whole PS/2 thing WAS a bad idea after all........
    • You must mean OS/2. But they didn't sell that off. I don't even think they could give that thing away, much less sell it.
  • by mrbcs ( 737902 ) on Tuesday December 07, 2004 @11:29PM (#11028238)
    I'm curious what effect this will have on the support website. I thought IBM did a great job of fixing their driver site in the last couple 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.

  • by Coryoth ( 254751 ) on Tuesday December 07, 2004 @11:31PM (#11028257) Homepage Journal
    The most interesting bizarre theory behind some of this was posed at The Register [theregister.co.uk]. 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.
    • I'm going with alliance. It'd be stupid for Apple to be assimilated by IBM when Apple is on the rise and not appearing to peak any time soon. Besides, they've already partnered with IBM for chips. Why not let IBM help Apple sell more computers so that they can sell more chips to put in those machines. That seems perfectly logical. IBM, IMHO, is getting a bit of an old-and-crusty feel to it. It'd do them some good to get a little more hip. Besides, all the Unix/Linux experience they have could help Ap
    • by stevesliva ( 648202 ) on Tuesday December 07, 2004 @11:40PM (#11028361) Journal
      I think it's dumb speculation. IBM is focusing-- as it always has-- on business. It's divesting personal computers that have become consumer commodities. Why would it purchase a company whose stock has risen a huge amount based entirely on the profits of a personal music player?

      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?

    • Freedom from MS (Score:5, Insightful)

      by bstadil ( 7110 ) on Tuesday December 07, 2004 @11:47PM (#11028421) Homepage
      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

      • Wow, I suspect you just hit that one on the head. MS is one of the few tech companies that is a bigger fish than IBM, and IBM doesn't like that.
        • Re:Freedom from MS (Score:5, Insightful)

          by T-Ranger ( 10520 ) <[jeffw] [at] [chebucto.ns.ca]> on Wednesday December 08, 2004 @12:14AM (#11028670) Homepage

          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.

          • by xswl0931 ( 562013 ) on Wednesday December 08, 2004 @05:10AM (#11030127)
            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.
    • by mnmn ( 145599 ) on Wednesday December 08, 2004 @12:00AM (#11028548) Homepage
      Your comment suddenly made me realize something.

      Add up these facts:

      Apple is powerpc

      IBM is powerpc

      Apple is OSX based on FreeBSD

      IBM spent $1 bil on Linux last year

      Apple competes with Intel and Microsoft

      IBM competes with Intel and Microsoft

      Microsofts apps depend on Intel (Wintel)

      Intel Sales depend on Microsoft OS and apps

      Intel is a monopoly (they still are, declining)

      Microsoft is a monopoly

      IBM and Apple are losers in these monopolies

      IBM has been releasing apps for Linux on pSeries

      Apple has been pushing apps for UNIX on PPC

      IBM supports OSS community, increasing free apps

      Free apps can be compiled on any arch.

      Making sense now?

      No?

      Say Linux goes a bit more mainstream, Opensource apps increase in numbers, especially for powerpc, both IBM and Apple win, Intel and Microsoft lose.

      This is more true of servers than desktops... for now. IBM can take the server share (cheapest pseries now is $6k, with very few under $10k, Apple the desktop share). They both have been depending more and more on opensourced apps and OSes, and have had past alliances (PReP machines), that worked. Both created successful computer lines and are confident in doing the same again. Both have been highly marginalized by Wintel Inc.

      IBM is pretty much getting rid of x86 on desktops, keeping only the x86 on servers. With AMD as a good option, they really dont need Intel for anything now, havent been relying on Microsoft either for much beside xSeries OSes (online catalog shows SLES and Redhat AS as options alongside Win2003).

      The whole industry, at least the bigger players are moving away from the wintel alliance, and we can expect a showdown. Wintel wants the entire market to itself, everyones threatened. Sun, SGI, Novell have seen the light at the end of the tunnel, no reason for them not to join. Apple and IBM must do something while they still have the kick.

      Tell me if I'm way off my base here. I have a premonition of a tech sector mortal kombat with entire vertical architectures against each other, x86+win32 and other arches+other oses. I see IBM moving away from x86, at least from Intel... Athlon64 is too good a deal to turn down.

      Am I wrong or is the Intel+Microsoft alliance just not that threatening?
    • by Infonaut ( 96956 ) <infonaut@gmail.com> on Wednesday December 08, 2004 @12:25AM (#11028760) Homepage Journal
      I'm with you, Coryoth. IBM and Apple are doing fine in their current relationship. Apple uses IBM chips. IBM pushes businesses to realize that Windows isn't the only OS on the block, which benefits Apple.

      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.

  • Huh? (Score:3, Insightful)

    by gremlins ( 588904 ) on Tuesday December 07, 2004 @11:31PM (#11028259)
    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.
  • by Tragek ( 772040 )
    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.
  • 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 kep
  • by wasted ( 94866 ) on Tuesday December 07, 2004 @11:38PM (#11028338)
    ...IBM will keep an 18.9 percent stake in Levono. Lenovo will pay...

    I was going to make a smart alec remark, but the first return on a Google search of Levono [google.com] leads to a site for a Lenovo product. [series60.com]
  • We've been reevaluating our desktop vendor of choice lately. Most of them are basically commodities at this point, but even though I don't usually have any kind of attachment to a particular vendor, I can't see buying PCs from a Chinese-owned IBM... yeah, I know everything inside most PCs says Made in China, but...
    • 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.

  • by PornMaster ( 749461 ) on Tuesday December 07, 2004 @11:42PM (#11028377) Homepage
    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.
  • With the Dragon [slashdot.org] chip
  • 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
  • IBM's PC's have been apalling for years (at least in the australian market)

    But none of the big OEM's are good, simply beacuse they're big enough to customise the hardware, and they don't do that to make it better, they do it to make it cheaper.

    My employer buys from local beige box OEM's these days. This has two effects:

    1) Quality known brand components

    2) If there's a problem we can take the box to the shop, no messing around with call centres and freight services.

  • Anyone think the new company will maintain the high standard IBM set? Yes, I know about the current Thinkpad debacle but I have bought 6 in the past 2 months and my users all agree on the superior build quality, especiailly compared to the ubiquitous Dells. I'm not sayin Dells are that bad but in laptop build quality, the Dells lag behind IBM, Apple, and Toshiba noticeably.
  • Protip: (Score:4, Interesting)

    by sockonafish ( 228678 ) on Tuesday December 07, 2004 @11:51PM (#11028459)
    Buy Apple stock now.

    IBM is now fully committed to the PowerPC platform.
  • 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."

    Geez. You know someone got tossed into the Gorge Of Eternal Peril before the ink dried on that one.

    Add one more com

  • I guess this leaves only Toshiba as a viable option for notebooks, at least for those of us traveling internationally.

    IBM and Toshiba were the only companies with decent international notebook warranty support, in my experience.

    I would love to be pleasantly surprised and have Levono continue IBM's international service, but unless they can use IBM's service network I don't see much hope. I am not holding my breath.

    Ian
    • Don't forget Apple (Score:3, Insightful)

      by mrklin ( 608689 )
      Apple provides international warranty and support.

      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

  • It's time for the other half of this rumor to come true. I'd love to see Apple and IBM do the impossible and join forces.

    Linux and BSD from major companies, with the potential to unite the hippies and the businessmen. The programmers and the grandfathers (and the grandfathers who happen to be programmers).

    This could be a beautiful thing. Let's just hope it isn't simply another case of an American company selling out to the Reds. Let's face it, it will be much more fun if it's a case of two of our favorite

  • My school [wfu.edu] has a major contract with IBM, which I think we just renewed this year or last. This leaves me wondering what's going to happen now, since we buy several thousand IBM ThinkPads annually (for incoming freshman and replacements for the juniors... and professors, every other year). I certainly hope that the ThinkPad line won't suddenly plummet in quality with this move and leave us stuck with junk computers. And predictions with regards to quality here?
  • IBM Workers (Score:5, Informative)

    by Ween ( 13381 ) on Wednesday December 08, 2004 @12:06AM (#11028602)
    I live near the IBM PC Division Headquarters (RTP North Carolina). On the news the General Manager of that division (Fran Somebody) said that since there was very little overlap between the two companies that most of the current employees will remain on. She went on to say that her and her entire management team would remain. Hopefully this bodes well for the quality.. at least in the short term until its decided where money could be saved at. I would suspect that eventually those jobs would be moved overseas where the labor is cheaper. The lady also said that the deal wouldnt be final until 2Q 2005.
    • Re:IBM Workers (Score:3, Insightful)

      by OneFix ( 18661 )
      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 p
  • by tsangc ( 177574 ) on Wednesday December 08, 2004 @12:54AM (#11028984)
    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.
  • Sad news? (Score:3, Insightful)

    by Richard_J_N ( 631241 ) on Wednesday December 08, 2004 @01:01AM (#11029024)
    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).
  • by Xenex ( 97062 ) <xenex@opinioPARISnstick.com minus city> on Wednesday December 08, 2004 @01:28AM (#11029190) Journal
    IBM stopped making personal computer before Apple. I'm sure there's some kind of ironic victory here somewhere...
  • by doormat ( 63648 ) on Wednesday December 08, 2004 @02:45AM (#11029616) Homepage Journal
    IBM Thinkpads were the only top-tier notebook in the US, and now all thats left that I would like is an Apple iBook.
  • Now we all need to download new drivers from www.thinkpad.cn [thinkpad.cn]...
  • by Andy_R ( 114137 ) on Wednesday December 08, 2004 @07:55AM (#11030647) Homepage Journal
    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?
    • It's not false advertising for a company to sell its trademark. It happens all the time. Have you seen all the Harley Davison crap out there? It's pretty obvious that the owners of Harley Davison treats its trademark like most people treat toilet paper.

      And besides, IBM has not made its own computers for years. They're all made in China by third parties. IBM merely slaps its name on them. As does Dell, HP, etc. Nothing is really changing.

  • by unfortunateson ( 527551 ) on Wednesday December 08, 2004 @08:36AM (#11030810) Journal
    HP.

    1) Apple's stock price is inflated because of the iPod
    2) HP won't want to give up their marketing of the iPod, or the perceived loss of control if IBM snatches up Apple
    3) A bidding war between HP and IBM for the whole of Apple's biz would benefit neither, only Apple shareholders.

    So my conclusion is that IBM isn't going to buy up Apple, unless it was silly enough to have a deal planned to spin off the iPod/iTunes unit to HP, and that's quite a cash cow to give up.

    The biggest side benefit of that might be that it could diffuse the Apple Corp. (Beatles) lawsuit, if Apple Computer is no longer the owner of a music-related product. A spinoff might be the only way to end that suit (Apple or whoever owns them would still have to cough up a big chunk of bullion to Yoko and Sir Paul, but it would end the long-term problems).

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