IBM puts its PC business up for sale - NY Times

Yahoo ^

[Sub-Driver]

IBM puts its PC business up for sale - NY Times Fri Dec 3, 2004 01:40 AM ET NEW YORK, Dec 3 (Reuters) - International Business Machines Corp. (IBM.N: Quote, Profile, Research) 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 on Friday.

IBM, now the No. 3 PC maker behind Dell Inc. (DELL.O: Quote, Profile, Research) and Hewlett-Packard Co. (HPQ.N: Quote, Profile, Research) , is likely to include all of its desktop, laptop and notebook 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. (0992.HK: Quote, Profile, Research) , 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.

[paulcissa]

The IBM logo is if you are a business that needs 24-7 hardware support. THAT is what you are paying for.

Paying for it does not infer that you will actually receive that support. I have dealings with them daily and have nothing at all good to say about their support organizations.

They offer nothing of value and should be culled from the marketplace; there's other more well organized and effective support corporations looking for that market share.

[battousai]

IBM - minus its PC business= Leave what?

What are they going to do, live off a few mainframe boxes? Sell typewriters?

Hardly, IBM makes more money selling software and consulting services than they ever did on PCs. In fact it may be still true but at one time IBM sold more software than $ wise than Microsoft.

I'm surprised it took them this long to do it, when I worked there 5 years ago we were still making a loss on every home PC sold, they were talking about it then i.e. getting rid of the home PC market, now they are just going to get rid of the whole thing.

The margins on PC sales are very very low! The money is in providing services.

[eno_]

The margins on PC sales are very very low! The money is in providing services.

Until corporate IT customers rebel at the BOHICA model. I'm always amazed at how much corporate IT customers pay for how little. Someone will figure out that you can run all IT for a 10,000-person company in India on PC servers using open source software, and it could not possibly suck more than the crap companies buy from CA and other "enterprise" vendors.

[Sam the Sham]

Isn't IBM partnered with Sony to produce a new processor called CELL which will be the long awaited merger of computer with HDTV ? Playstation 2 is set to use it.

[First_Salute]

Bump.

[Senator_Blutarski]

IBM's pension fund has been largely self-sufficient and has in fact has often been a source of "income" to the corporation. It is true that IBM recently put some money in to their pension fund, mostly because IBM has been milking the pension fund for a decade to prop up the botton line. For most of the last 15 years the pension fund has stood on its own while IBM has skimmed off the excess.

Go do some homework before you post.

[Core_Conservative]

What are they going to do, live off a few mainframe boxes? Sell typewriters?

They could always go back to their roots and sell meat slicers. LOL

[Dalite]

"IBM's pension fund has been largely self-sufficient and has in fact has often been a source of "income" to the corporation. It is true that IBM recently put some money in to their pension fund, mostly because IBM has been milking the pension fund for a decade to prop up the botton line. For most of the last 15 years the pension fund has stood on its own while IBM has skimmed off the excess.

Go do some homework before you post."

I'll admit that I have had no association with IBM in the past 10 years, and I haven't paid much attention to their internal net worth; other than the news.

Having admitted to that, I have to ask if "Largely self-sufficient", "often been", "recently putting some money", "mostly because", "milking the pension fund" and "for most of" are really indications of stability.

In my neck of the woods, third place doesn't wine the prize, there is no such thing as being "kinda pregnant" and if you overdraw your checking account by $.01, you are still overdrawn.

However, Your Mileage May Vary...

[chilepepper]

not necessarily -- their real thinkpads (as opposed to the i14XX series ACER's branded as IBM) are great machines.

unlike the DELL laptops we've bought (have had HALF of them go belly up in the last three years) NONE of the IBM thinkpads have failed, even though they receive far harsher usage... i would hate to see IBM's design team break up

[B4Ranch]

>>The margins on PC sales are very very low! The money is in providing services.<<

You got that right, especially when you outsource the online technical help to Calicut, Kanpur or New Delhi.

[ARCADIA]

The money is in providing services.

Yes, but the hook comes from packaging the service with the box. Get rid of the box, and you risk becoming an also ran.

All these guys are doing is selling the company and keeping the brand name. They figure they can live off the remaining good will for a couple of more years, or until their existing service agreements expire.

[eno_]

About half the $4BILLION (that sure is "some money," as you put it) that IBM added to it's pension to cover the shortfall is IBM stock.

Go do your own homework.

Now IBM is no longer #2 on the list of old-line companies that have a pension death sentence hanging over them. Now it is led by GM, which is massively screwed, followed by Ford, Exxon (Ow! in a resources business!), AMR and UAL, and various others.

But the sword of Damocles still hangs over IBM's head.

[Glenn]

Now Bill Gates can direct his company toward forward motion; rather than revenge.

What has IBM's hardware business to do with Microsoft? Other than mice and keyboards and the X-box, Microsoft is not a hardware company. Gates won the OS war a long time ago, unless you believe OS/2 is still a contender. You simply don't understand.

[leadpencil1]

The PC business is a distraction to IBM.

[Dalite]

"What has IBM's hardware business to do with Microsoft? Other than mice and keyboards and the X-box, Microsoft is not a hardware company. Gates won the OS war a long time ago, unless you believe OS/2 is still a contender. You simply don't understand."

Let me try to break it down for you....

From reply # 6
"Well, maybe Bill Gates will finally get over his feud with IBM over not accepting the version of the basic programming environment that he wrote and offered to them in the very early days."

Those of us that were a part of the home computer as early as the early as the mid 70s are aware of the animosity between Bill Gates and IBM over their refusal to use his version of Basic. He set out to avenge himself by writing MS-DOS, and founding Microsoft..

It may come a surprise to discover that early IBM also offered a variety of software packages that could be purchased by the end user. These packages were in competition with the emerging Microsoft for years before the computer became a staple for consumer use. They included the general gambit available back then: Wordprocessor, Database and Spreadsheet. They eventually got around to Networking, and were planning on taking the industry by storm with micro-channel and OS/2.

It is no doubt that IBM dropped out of the software contention some time ago. I believe their point of understanding came when they found they were selling tons of token ring hardware, and no IBM Networking software. It was then that they admitted that Novell was cleaning their plow, and they weren't competitive in the software business.

However, until the mid 1990s, they still sold a machine that could run Their DOS as well as MS DOS, and both were profit centers; one for Microsoft, and one for IBM.

The general point is, now that IBM is selling it's small-systems branch, they no longer represent any threat to Gates; as they no longer have a dog in the hunt.

I hope this will be a little easier for you to understand.

I have run buggy software from both companies, since the mid 80's.

Much of the problems originate from the basic fact that the PC was designed from the ground up to never be a multiuser / multitasking platform. Any OS that attempts to do either or both will ultimately end up against the wall in development, as time-slice management is the best that they can come up with.

This won't change until the processor evolves to a 68xxx type or one designed to handle more than one user doing more then one task.

[Glenn]

He set out to avenge himself by writing MS-DOS, and founding Microsoft..

Gates did not write MS-DOS. He purchased it. Look it up.

As for the rest of your post, you aren't making the argument that this sale will somehow result in a better Microsoft.

[RightOnline]

Boy, try to keep up. PC biz is decent revenue, s**t for profit. Now, scroll up and read what I actually wrote (HINT: "servers" is in the sentence). Now.......go do your homework, then come tell me about what a big, sluggish, slovenly competitor IBM is, k?

[RightOnline]

Bulls**t. They pumped billions into it not 2 years ago. Where in the hell do you people supposedly get your information???? Good lord.............

[durasell]

Competition too hot and China is set to enter the market one way or another. Do you want to be IBM and compete with three hundred dollar laptops sold in blister packs?

[eno_]

Bulls**t. They pumped billions into it not 2 years ago. Where in the hell do you people supposedly get your information???? Good lord.............

The number is $4billion. That's how much they were short.

Half the shortfall was covered with cash. Half with stock. Make of that what you will.