The China Card

The most notable example of this trend were the Churchills, whose alliance with the Jerome family in America produced Winston, Britain's wartime prime minister.

Fast-forward to 2005, and we can see a corollary of this phenomenon taking place in the world of technology. Financially strapped brands such as IBM's ThinkPad need an infusion of capital. And in order to boost their status, Chinese manufacturers need to acquire a world-class brand that they can't build themselves.

Given that, it's logical to conclude Lenovo's move to acquire the rights to the IBM PC brand is only the first of many such deals. The Chinese government has made no secret of its global expansion plans. As such, a number of Chinese companies, especially those currently focused on peripherals in the United States such as Shanghai Video and Audio (SVA), will probably be required to expand their U.S. product base to give them the necessary capital to acquire larger global brands. And as goes China, so might LG Electronics and Samsung of Korea, which are not likely to sit idly by while world markets get divvied up.

One company with an attractive brand is 3Com, which already relies on China-based Huawei to provide it with switches to compete with Cisco. And some other Chinese company may make Hewlett-Packard an offer it can't refuse for the rights to the Compaq brand, especially when you consider the potential rivalry with Taiwan-based Acer. Similarly, a company in China could be coveting the Phillips global brand. And let's not forget that a number of distributors are probably negotiating to help Chinese companies set up shop stateside.

But let's not stop there. What's true in hardware is also true in software. There's no reason we shouldn't expect to see companies in India moving to expand by acquiring global software brands.

Welcome to the latest rendition of the global IT economy.

Where are you looking overseas? I can be reached at (516) 562-7477 or via e-mail at [email protected].