Saturday, December 04, 2004

IBM may exit PC business, Up for Sale !!!

International Business Machines Corp. has put its personal computing business up for sale in a deal that could be worth as much as $2 billion, the New York Times reported Friday.

IBM (Research), now the No. 3 PC maker behind Dell Inc. (Research) and Hewlett-Packard Co. (Research), is likely to include all of its desktop and laptop computers in the sale, which could earn it between $1 billion and $2 billion, people close to the negotiations told the newspaper.

Lenovo Group Ltd., China's top PC maker, and at least one other company are said to be in talks with IBM, the Times reported. There have been media reports that Lenovo, which controls more than a quarter of China's PC market, was poised to set up a joint venture with IBM.

Gartner Inc., a leading research firm, forecasted earlier this week that three of the top 10 personal computer makers would exit the market by 2007, citing slower growth rates and narrower profit margins. It did not name any companies.

Despite its large size relative to smaller competitors, Gartner added that IBM and HP's PC divisions were vulnerable to being spun off "if their drag on margins and profitability are deemed too great by their parent companies."

IBM could not be reached immediately for comment


Momekh said...

This is what IBM had to say:

"It is IBM's practice not to comment on rumors or speculation. When we have something to announce, we will," an IBM spokesman told CNN Business News.

IBM is probably playing it cool. But i still dont get it... if IBM is tight-lipped about it (but havent denied it either), then why the story in CNN in the first place? Nonetheless, where there's smoke, chances are that there is a fire as well.

But IBM completely stepping out of the game? No more thinkpads? How can that be? I find its quite unbelievable. Its like saying that Mercedes will stop making cars. I mean, computers and IBM are almost synonyms. Well, wait and see i guess.

Shayan Abdulrehman said...

This was shocking, read it too CNET News. Simply the PC sales does not have a high profit margin for businesses to sustain.

The same reason why HP acquired Compaq to solidify their position. The only winner is Dell who still are in the business and make handsome profits.

It's a shame we will be no longer seeing IBM machines (pc/laptops). There's no doubt IBM laptops are the best.