Feeds

IBM sells PC biz to China

Notebooks, PCs in five-year franchise

  • alert
  • submit to reddit

Reducing security risks from open source software

So, it's true. IBM, creator of the original PC in 1981, has sold its computer business to Chinese assembler Lenovo, formerly the Legend Group. Lenovo will pay Big Blue $1.25bn, with $650m in cash, and IBM will retain an 18.9 per cent stake in the joint venture. Lenovo will be IBM's preferred supplier and retains the right to use the brand for five years. The deal excludes IBM's eServer x86 PC servers.

IBM's chief executive Sam Palmisano cited economies of scale, explaining in a release that the consumer PC market was increasingly resembling the consumer electronics business, and that the deal would help maintain IBM's focus on business computing.

The deal has huge symbolic significance, far greater than IBM's five per cent market share suggests. IBM's stake in the largest Chinese PC OEM could prove to be one of its better investments, as the domestic market in the PRC has the most promising potential for growth: the government has vowed to urbanize a billion citizens over the next decade.

Originally the deal was rumored to exclude IBM's notebook line - and forum members over at Bill Morrow's Thinkpads.com site were anxious that the Thinkpad line maintains its stellar reputation for build quality and reliability - not to mention documentation and parts support. "I'm a diehard Mac fan but the IBM Thinkpad is the only PC I will buy," wrote one, when the rumors surfaced last week. Lenovo has next to no R&D experience at present. Thinkpad is undoubtedly a stronger brand than the one Lenovo produced last year.

The joint venture will be headed from New York with major offices in Raleigh, North Carolina and Beijing. Stephen Ward, the Personal Systems Group director at Big Blue, will be the operation's founding CEO. Yuanqing Yang, Lenovo's current President and CEO, will become chairman of Lenovo if the deal closes as expected in the second quarter of next year.

Lenovo expects to have close to 19,000 staffers at the close of the deal with 10,000 of these workers - 40 per cent of which are in China and 25 percent in the US - coming from IBM. ®

Related stories

IBM to take 5% of Lenovo to seal PC biz deal - report
IBM, Lenovo to announce JV 'this week'
IBM said to be in PC divison sell-off talks
IBM to Power China
IBM, Lenovo ponder world desktop PC JV
China's 3G 'wonderchip' primed and ready
Dell drops out of China's low-end PC market
AMD bags Chinese giant
Chinese PC giant sets new benchmark in branding banality
Motorola gambles big on Linux, Sinocapitalism

Eight steps to building an HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Bose says today IS F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.