IBM to sell its PC and ThinkPad business

[Atahualpa]

Originally posted by Asher

Eh? They still made $100M in profit on the division.

The problem is Sam Palimisano is all about growth. He thinks IBM resources are better used in higher-margin, high-growth areas. The division was still very profitable.

OTOH, if he sells it for $2 billion, he had made all the profit for the next 20 years in one single day (assuming that profits don't drop).

[Whaleboy]

Acer are pretty good aren't they?

[Asher]

Originally posted by Whaleboy
Acer are pretty good aren't they?

They may be decent, but they're no IBM...

[Agathon]

Meanwhile Apple stock is up this year.

So much for those cretins like Paul Thurrott who have long predicted Apple's death.

I guess IBM just can't hack it in the world of personal computing.

[Q Classic]

christ, everything asher's saying about ibm's laptops... i've been saying.



I THOUGHT THAT FIRST, YOU COPYCAT!

[Agathon]

There was a story doing the rounds the other day that three of the major PC manufacturers will be forced out of the business by 2007.

I guess IBM jumped the gun.

[Asher]

Originally posted by Agathon
Meanwhile Apple stock is up this year.

So much for those cretins like Paul Thurrott who have long predicted Apple's death.

I guess IBM just can't hack it in the world of personal computing.

IBM stock is up this year as well.

Who cares about Apple?

Apple needs IBM to survive right now...

Apple's a niche computer maker on the way to joining the ranks of other consumer electronics makers.

[Dinner]

Originally posted by Azazel
I don't think it's a smart decision... but I guess they know better...

Low margin or not it's hard to see how someone could be taken seriously in the hardware business unless they sell a full line of computers. I'm sensing IBM is doing what AT&T did in the 80's; starting a slow downward spiral. Hopefully not but we'll see.

[Asher]

Originally posted by Oerdin
Low margin or not it's hard to see how someone could be taken seriously in the hardware business unless they sell a full line of computers. I'm sensing IBM is doing what AT&T did in the 80's; starting a slow downward spiral. Hopefully not but we'll see.

IBM's high-end customers don't care about desktops or laptops, they're fundamentally different markets.

They want reliable solutions with high performance and great service, and all of this is independent of the small PC market.

You have to remember, these aren't typical customers IBM caters to. They cater to customers who do their research, customers who will be spending millions of dollars without blinking. These kinds of customers don't base their decision to use IBM Consulting services or get IBM to build their supercomputer based upon IBM having NetVista desktops, ThinkCentre workstations or ThinkPad laptops.

[Q Classic]

ibm's market is also predominantly --surprise, surprise-- businesses.

[Dinner]

Originally posted by Asher
The problem is Sam Palimisano is all about growth. He thinks IBM resources are better used in higher-margin, high-growth areas. The division was still very profitable.

He may be all about growth but he's leaving a core business in his pursuit of making his short turn figures look better. Over all it's hard to see this as good for the company even if it does bring a quick shot of money to investors.

He's trying to recast the company into something else but that's going to be difficult and right now when you say IBM people think computers. Will they be able to maintain that level of market awareness after they no longer have loads of costumers seeing and using their computers on a daily basis? We shall see.

[Az]

There was a story doing the rounds the other day that three of the major PC manufacturers will be forced out of the business by 2007.

I guess IBM jumped the gun.

Yeah, I had that report in mind, as well, when I read this thread.

[Dinner]

Originally posted by Atahualpa
OTOH, if he sells it for $2 billion, he had made all the profit for the next 20 years in one single day (assuming that profits don't drop).

That's what the CEO is thinking. He wants to goose short term profits so he looks good but in the long run it will be bad for the company. IBM's main costumers may be business but if the people who invented the PC can't hack it in the PC market then I'd bet lots of potential costumers are going to see them more and more as a has been.

[Az]

Oerdin: I sorta feel that way, as well, however, that's where the cold financial analysis ( that says that if they sell it for 5bil, they're selling it at 50 P/E, and thus are doing a good deal ) fails.

[Asher]

Originally posted by Oerdin
He may be all about growth but he's leaving a core business in his pursuit of making his short turn figures look better.

It hasn't been a core business since the early 90s. It's less than 10% of IBM's revenues these days.

He's trying to recast the company into something else but that's going to be difficult and right now when you say IBM people think computers.

Regular consumers think that, yes.
IBM's target customers don't.

Will they be able to maintain that level of market awareness after they no longer have loads of costumers seeing and using their computers on a daily basis? We shall see.

You don't seem to be in touch at all with IBM's customer base. They are not at all influenced by what brand their PC is...

I cannot emphasize enough -- IBM is not a typical consumer's company. They are a business company, period. Businesses do NOT base their purchase decisions based on brand awareness.

I assure you, the customers who spend hundreds of millions of dollars on IBM contracts do not do so based on the fact that IBM has 5% of the PC market.