Saturday, December 04, 2004

R.I.P. the IBM PC

After my post about Firefox this caught my eye yesterday.
IBM said to be eyeing a sale of its PC business
Published: December 3, 2004, 8:03 AM PST
By John G. Spooner and Martin LaMonica
Staff Writer, CNET

IBM, which gave legitimacy to the personal computer business in the 1980s, is said to be negotiating the sale of its PC unit in a move that could reshape the industry.

The company is negotiating with Chinese manufacturer Lenovo Group, formerly known as Legend, and at least one other buyer to sell its PC business unit, according to a report in Friday's New York Times. The unit could fetch as much as $2 billion, the report said.

IBM spokesman Clint Roswell on Friday said the company's policy is not to comment on rumor or speculation. Representatives at Lenovo were unavailable for comment.

In morning trading, IBM's stock was up 1.28 percent to almost $97.

IBM selling its PC business to Lenovo, which would most likely result in a joint venture of some sort, would make sense for both companies, analysts said. Such a deal would free IBM--which has been moving away from commodity products--from managing a difficult and often money-losing venture, while still giving it access to desktops and notebooks to provide to its customers.

"The PC business is a sort of also-ran, me-too sort of business (for IBM). There are a lot better businesses, including global services and some of the larger computers, that IBM participates in," said Roger Kay, an analyst with IDC. An agreement would "get IBM out of what they think of as a nonstrategic, non-yielding business."

As one of the first IBM PC users in 1982 I can attest that first PC's were also "also-ran" and "me-too." It was only the power of IBM's reputation and the corporate world's toddy behavior that made the PC Time Magazine's "Man of the Year." One could also argue that by giving up - until it was too late - control over their PC's operating system IBM both sowed the seeds of their own PC's demise and let the wolf into the hen house.

The PC did, however, set off an interesting war of sorts between IT departments and PC users that has been fun to watch, although not much fun to be a part of. As one IT Manager told me a few years ago, "Bibb, it is all about control. We almost let it get away with those damn PC's. But now that we are networking, things are getting back to normal."

The desktop IBM PC had become irrelevant years ago, although there are those who have loved their laptops.

R.I.P the IBM PC.

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