Wednesday, November 26, 2014
Search
  
Submit your own News for
inclusion in our Site.
Click here...
Breaking News
Twitter Tracks Apps Installed On Your Device, Introduces Offers
Ubisoft Apologizes For Assassin's Creed Unity Issues, Offers Free Game
Europe Wants Right-to-be Forgotten to Go Globally
Far Cry 4 Game Available For Free With Purchase of 840 EVO SSD
UK Music Industry Seeks For New Tax on CD Copying
Samsung's DeepSort Sorting Engine Prevails In Benchmarks
Sony Plans E-Paper Watch: report
HP Reports Fiscal 2014 Full-Year and Fourth Quarter Results
Active Discussions
Hi All!
cdrw trouble
CDR for car Sat Nav
DVD/DL for Optiarc 7191S at 8X
Copied dvd's say blank in computer only
Made video, won't play back easily
New Features In Firefox 33
updated tests for dvd and cd burners
 Home > News > General Computing > IBM sel...
Last 7 Days News : SU MO TU WE TH FR SA All News

Wednesday, December 08, 2004
IBM sells PC business to Lenovo


IBM has confirmed that its has sold its personal computer businesss to Chinese group Lenovo, in a complex deal valued at $1.75billion and which, importantly, gives the company rights to use the IBM Think brand.

So IBM is looking for a way out of the PC business. Big Blue's personal computer division is going to be sold. It's hard to believe after all these years, even though the PC business at IBM has never really recovered from the kidney-punch Microsoft delivered to it by withholding licensing for Windows 95 until 15 minutes prior to launch. The malignant monopoly was just as open to the possibility of competition in those days as it is today, so IBM had to be punished for daring to push OS/2. On the other hand, someone might say that this movement strengthens the US factor in the huge Chinese market.

The deal immediately moves Lenovo, formerly the Legend Group, from being the eighth-largest PC maker globally to the third spot, behind only Dell and Hewlett-Packard. It also represents the largest ever foreign acquisition by a Chinese company.

Under the terms of the sale, Lenovo will pay $600 million in cash and $650 million in common stock, and assume $500 million in IBM debt. It gains the right to produce IBM-branded PCs under a five-year licencing agreement.

IBM will take an 18.9 percent stake in Lenovo, and BigBlue will be the Lenovo's "preferred supplier" of support services and customer financing.

The deal is expected to be finalized in the second quarter of 2005.

IBM's chief executive Sam Palmisano cited economies of scale as one reason behind the move, saying the consumer PC business is increasingly resembling the consumer electronics sector. "This further strengthens IBM's focus on the enterprise [sector]", he said.

The sale continues IBM's strategy of selling fewer commodity products towards becoming a supplier of services, software and high end computers. Even though the company played a crucial role in making PCs a global business, analysts suggested IBM has not made big profits from personal computers, and has sometimes lost money, even tough in its last financial year, it was an $11 billion business.

The enlarged Lenovo will have annual revenues of more than $12billion and will move its headquarters from Beijing to New York. Stephen Ward, currently head of IBM's PC division, will become chief executive, while Yuanqing Yang, Lenovo's president and CEO, becomes chairman.

About 10,000 IBM employees will join Lenovo following the completion of the deal, of whom 40 per cent are based in China. Roughly 2,500 US employees are affected.

The companies said no job losses are involved, and that the new Lenovo would employ about 19 000 people.

IBM's competitors were quick to predict that the deal would fail. "When was the last time you saw a successful merger or acquisition in the computer industry? It hasn't happened in a long, long time," said Michael Dell, founder and chairman of the largest PC maker, at a conference in San Francisco on Wednesday.

Duane Zitzner, head of HP's PC division, predicted that the deal would "create a lot of turmoil within IBM accounts" from which HP would benefit.

IBM outsourced its PC manufacturing operations in Europe and North America to contract manufacturer Sanmina-SCI. Its PC manufacturing in China now becomes part of Lenovo.


Previous
Next
Microsoft in final testing on Windows Server 2003 SP1        All News        Dell, Oracle, Intel, EMC Collaborate On MegaGrids
Microsoft in final testing on Windows Server 2003 SP1     General Computing News      Dell, Oracle, Intel, EMC Collaborate On MegaGrids

Get RSS feed Easy Print E-Mail this Message

Related News
IBM Patents Cloud Privacy Engine
IBM Introduces Verse Business E-mail With Social Media Integration
Lufthansa Signs $1.25 billion Deal with IBM
Twitter and IBM Form Partner to Data Analytics
Glonbalfoundries Buy IBM's Micorelectronics Business
New IBM Tape Cartridge Holds 10TB Uncompressed Data
IBM and SAP Partner On Enterprise Cloud
IBM Claims New OpenPOWER-Based Systems Are Superior Alternative to x86-Based Servers
Lenovo Set to Close Acquisition of IBM's x86 Server Business
IBM Offers Watson Data Tool To the Mainstream
IBM and Intel Bring New Security Features to the Cloud
IBM Tries To Strengthen Its Presence In China With Local Vendor Deal

Most Popular News
 
Home | News | All News | Reviews | Articles | Guides | Download | Expert Area | Forum | Site Info
Site best viewed at 1024x768+ - CDRINFO.COM 1998-2014 - All rights reserved -
Privacy policy - Contact Us .