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."
Get a Gateway (Score:5, Funny)
Re:Get a Gateway (Score:2)
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).
Wait so your saying? (Score:3, Funny)
Re:Get a Gateway (Score:2, Insightful)
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)
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)
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)
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, Informative)
Lenovo. They're a big name (the biggest) in China, used to be called "Legend"; good quality. Obviously a lot of the value of the purchase for them is to get the international IBM brand recognition. And you know that just about 99% of PCs and laptops (including Macs) are made in China or Taiwan?
Re:Get a Gateway (Score:3, Interesting)
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)
Re:Get a Gateway (Score:5, Insightful)
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]
Re:Get a Chinese Apple (Score:3, Interesting)
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"
Re:Get a Chinese Apple (Score:3, Interesting)
Re:Get a Gateway (Score:5, Funny)
O ----- You.
-|-
Re:Get a Gateway (Score:3, Insightful)
I think the laptop market is nearing saturation in the U.S. A few years back, we thought th
because it was pretty damn good (Score:3, Insightful)
We were using their S50 deskt
Re:Get a Gateway (Score:5, Insightful)
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.
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)
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
Re:Get a Gateway (Score:5, Informative)
2. 2. They dont have a "middle" size powerbook. They go from tiny 12 to large 15+. Where is the 14 ?
The 15 is the middle size. Apple also sells a lunch tray version. Don't believe me? Walk into the cafeteria at Apple some time and you'll see what I mean. 17 inches of usable food tray space. :-D
3. What the hell is the deal with the speakers being next to the keyboard ?
Simple. It gives you bass response that doesn't suck. Of course, some might suggest moving the speakers to the screen, but it turns out that clear speakers are neither. :-D
Reuter's story (Score:5, Informative)
Re:Reuter's story (Score:2, Informative)
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)
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)
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
Re:Reuter's story (Score:3, Interesting)
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)
Re:Quality (Score:5, Insightful)
Re:Quality (Score:3, Insightful)
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)
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)
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)
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
What about workstations? (Score:2)
Re:What about workstations? (Score:3, Informative)
Re:What about workstations? (Score:2)
Apex buys Sony next? (Score:5, Insightful)
Re:Apex buys Sony next? (Score:5, Informative)
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
Re:Apex buys Sony next? (Score:4, Funny)
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"
ThinkPad design is in Japan (Score:4, Informative)
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.
Re:Apex buys Sony next? (Score:4, Insightful)
PS/2 (Score:2, Funny)
Re:PS/2 (Score:2)
driver and support site? (Score:5, Interesting)
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.
Re:driver and support site? (Score:2)
Most interesting "wild speculation" (Score:5, Interesting)
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.
Re:Most interesting "wild speculation" (Score:3, Interesting)
Re:Most interesting "wild speculation" (Score:5, Insightful)
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?
Re:Most interesting "wild speculation" (Score:2)
Why would it purchase a company whose stock has risen a huge amount based entirely on the profits of a personal music player?
I would *love* to see an IBM-Apple alliance.
Freedom from MS (Score:5, Insightful)
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 (Score:2)
Re:Freedom from MS (Score:5, Insightful)
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.
Where did you get your income numbers? (Score:4, Interesting)
Re:Most interesting "wild speculation" (Score:5, Interesting)
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?
Re:Most interesting "wild speculation" (Score:5, Insightful)
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.
Re:What if IBM just buys Apple's hardware division (Score:2)
I don't at all expect that to happen, but it would be interesting.
and lose the whole widget thing? (Score:2)
watch someone do a clean install of a M$ box and a Mac..... the Mac is cake partially because most of the drivers are in the OS already, and the OS only
Huh? (Score:3, Insightful)
I won't be the first (Score:2, Insightful)
Re: (Score:2, Interesting)
Levono, Lenovo, same thing? (Score:3, Informative)
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]
Something seems off... (Score:2)
but what ? Are you being racist ? (Score:3, Insightful)
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.
Changing IBM's relationship with MS (Score:4, Interesting)
Re: (Score:2)
I wonder if they'll start marketing computers (Score:2, Interesting)
Something is fishy here (Score:2, Insightful)
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
Good riddance now if only dell would die (Score:2)
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.
This sucks (Score:2)
Protip: (Score:4, Interesting)
IBM is now fully committed to the PowerPC platform.
Um. (Score:2)
Need a threesome (Score:2)
Geez. You know someone got tossed into the Gorge Of Eternal Peril before the ink dried on that one.
Add one more com
International Support -- Only Toshiba left? (Score:2)
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)
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
I'm ready! (Score:2)
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
and just as my school renews its ThinkPad contract (Score:2)
IBM Workers (Score:5, Informative)
Re:IBM Workers (Score:3, Insightful)
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
Not really rocket science (Score:5, Interesting)
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)
Down with Big Brother! (Score:5, Funny)
Here I come Apple (Score:3, Funny)
How do you spell 'driver download' in Mandarin? (Score:3, Funny)
False Advertising in the Future? (Score:4, Insightful)
IBM might be allowing Levono to use the names, but will consumers and the courts allow it too?
Re:False Advertising in the Future? (Score:3, Informative)
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.
IBM won't buy Apple if it has to bid against... (Score:3, Informative)
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).
Re:going going gone... so sad (Score:2)
Re:going going gone... so sad (Score:4, Funny)
No, they pretty much just assemble the computers from components. Pretty much the same components that any decent quality manufacturer uses.
Re:going going gone... so sad (Score:4, Informative)
Re:lenovoepad? (Score:5, Funny)
Will miss not having a T1000 eventually...
Re:lenovoepad? (Score:2)
Re:So wait. (Score:3, Interesting)
Re:Can someone please clear this up? (Score:5, Informative)
The IBM game (Score:5, Funny)
2. Split the AB divison to improve "focus."
3. Repeat steps 1 through 3.
Re:Can someone please clear this up? (Score:2)
Re:Thinkpads (Score:2)
Quality mechanical parts and Manuals. (Score:2)
Yes, IBM mechanical design was top notch. While I've only been lucky enough to own two thinkpads, both were tanks, both are more than five years old and both still work great. The 90 MHz Pentium model with 16 MB of RAM may be obsolete by now, but I still use it and think it will one day make a nice wireless router. My PII runs Debian excellently and I use it every day. At work, thinkpads su
Re:Thinkpads (Score:5, Interesting)
I'll help you pronouce it (Score:2, Funny)
Compaq laptops have come a Long Way... (Score:2)
I know all the scare-stories to do with Compaq laptops, but I've had mine for well over a year now and it's survived more than enough for me to be able to recommend it to anyone out there who wants a solid notebook. This thing's taken falls off of tables two
Re:ThinkPad Universities? (Score:2)
Basicially, With the official announcement now out, what was a done deal for who we were going to buy from next year has instantly became a toss up all over again. At this point, relibility and customer service (the biggest selling points for IBM) is now questionable, and we don't need the students (who are already ticked off that their paying more because they had to pay for a laptop now) to start pointin
Re:Sucks! (Score:5, Interesting)
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.
IBM PC is not IBM Research (Score:3)
IBM is not selling its research division. In acutality it spends a great deal on research. It boasts the linkage between its consulting practice (BCS) with top notch research facilities (IBM Research) through the "on demand" methodology. To date, there isn't an existing consulting company that has the same connections. Deloitte Consulting, BearingPoint, Accenture, and Cap Gemini all have no equivalent to the IBM Research branch. Don't give up on big blue yet. They are simply moving into the "idea econ