Changes
In The PC Business
IBM Gets Out Of The PC Business;
It’s
amazing how many people are amazed at IBM’s exit from the PC
business. For years,
IBM has been a less than willing participant, staying in largely to
keep corporate and government customers who wanted a single vendor,
happy. But IBM removed
itself from the consumer PC business years ago and has sold only
rather reluctantly to small business (and then only through reseller
channels).
It
was only natural that they would ultimately realize that a product
line that wriggled between making very small profits and loosing
money might be better off sold off.
After all, IBM can always find as many PC’s to buy, at
favorable prices and terms, as it could need.
IBM,
however, found another way to do it, selling its PC business
(desktops and ThinkPad laptops) to Chinese PC manufacturer Lenovo.
The new company, which \ will take over IBM’s PC design and
marketing employees (manufacturing has long been outsourced), will
be the third largest PC company in the world with revenues exceeding
$12 billion. Lenovo
will establish a headquarters location in New York, for easy liaison
with IBM, who will retain an 18.9% interest.
IBM will treat Lenovo as its preferred source for personal
computers. It will
continue to use its business partner channel for distribution and
its Global Financing division to provide PC financing.
HP
Rearranges
HP
has decided to merge its Personal Systems Group (PCs) into its
Printing and Imaging Group, naming Printing and Imaging Group VP
Vyomesh (VJ) Joshi, to Executive Vice President, Imagine and
Personal Systems Group. Dwayne Zitzner who had previously headed the
personal systems group retired in December.
HP
says this is a way to more profitably accelerate growth and that it
will continue to state revenues for each part of the group
separately.
We’d
note that Printing and Imaging provided half of HP’s revenue and
most of their profits. Financial
analysts frequently urged HP to split it off to enhance shareholder
value, but HP’s board has considered this option and decided this
is a better choice.
With
IBM’s sale to Lenovo and fourth quarter results, this leaves Dell
in 1st position in the PC market, HP in second position
and IBM/Lenovo in 3rd.
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