Saturday, December 04, 2004
Farewell IBM PC
Yesterday, the New York Times reported that after 23 long years in the business, IBM plans to sell its PC unit to concentrate on higher margin businesses. While its hard to imagine a computer world without the IBM PC, what is even more interesting is who IBM PC's buyer may be. If all the rumours are true, Lenovo Computers of China (formerly Legend) is ready to pony up the $1-2 billion required to complete the purchase.
Lenovo, part owned by the Chinese government, is already the dominant player in the Chinese market, though they have been facing up to increasing competition from HP and Dell. Buying IBM will clearly give Lenovo a greater hold over the world's third (soon to be second) largest PC market. That said, Lenovo still faces a problem with global markets. It has a tiny 2.6% of the world PC market. Buying IBM will give it a 8% share, still well short of Dell and HP. Lenovo also has a brand recognition issue globally, something that the association with the IBM brand may help solve. Nevertheless, it is interesting to watch a major Chinese company muscle its way into the top echelons of the hardware market.
Lenovo, part owned by the Chinese government, is already the dominant player in the Chinese market, though they have been facing up to increasing competition from HP and Dell. Buying IBM will clearly give Lenovo a greater hold over the world's third (soon to be second) largest PC market. That said, Lenovo still faces a problem with global markets. It has a tiny 2.6% of the world PC market. Buying IBM will give it a 8% share, still well short of Dell and HP. Lenovo also has a brand recognition issue globally, something that the association with the IBM brand may help solve. Nevertheless, it is interesting to watch a major Chinese company muscle its way into the top echelons of the hardware market.
