IBM exiting the PC business?

The New York Times runs this article today, and well, that would be one story. IBM, the one company that basically put the computing business onto the landscape, exits the computer business and sells its division to a Chinese company, most probably Lenova, formerly Legend Computers.

It makes sense - Dell is just too competitive and it was clear that its constant gain in operational efficiency would put some computer makers out of business. IBM on the other hand is more and more the solution provider and a computer - basically a commodity - is not necessarily the cashcow that needs to be sustained. In fact, it has been a drain on IBM's resources for years, and they, a longer time back, already exited to consumer market.

Lenova, on the other hand, is a computer maker in China that has great ambitions. They struggled in their home market recently, as more and more multinationals put pressure on them. In addition a diversification drive combined with the intend to expand overseas did not too well for the company. So an acquisition of the IBM unit would make sense. It would increase its standing around the globe, reinforce its position in the Chinese market and allow them to enter the corporate world. The question is, will they be able to manage, firstly, the integration of the IBM unit, secondly, keep up the R&D levels that IBM had, and thirdly, are they able to keep the corporate customers. Dell is waiting and made great strides in this area as well.

(By Asia Business Consulting)