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Competitors Take Wait-And-See Stance To Possible IBM/Lenovo PC Deal

Word that IBM is mulling a move to sell its desktop and notebook PC business to China-based Lenovo has executives at most of its competitors scurrying to stay out of the limelight until more details become available.

Executives at vendors such as Acer, with its huge operations in China, and notebook PC competitor Toshiba said they prefer to hold comment until more details are available.

Other IBM competitors see the possibility of such a deal as an opportunity to snatch market share from potentially confused IBM corporate customers or as a vindication of their own desktop strategies.

John Thompson, vice president and general manager of Hewlett-Packard's Americas Solution Partners Organization, said the implications of the deal affect IBM customers more than any individual vendor.

"If I were a customer, I'd be asking, 'Is this another example of IBM decommitting from the volume space?' " said Thompson, who spoke with CRN from the Avnet Partner Solutions conference in Phoenix on Friday. "This seems to me exactly what they are doing. They have not been successful with their PC business, and this is perhaps why they are moving to sell it off."

Thompson said he wasn't concerned about any reduced manufacturing costs associated with the IBM brand because of the pending deal. "HP has always had better costs than IBM," he said.

Sun Microsystems, in an e-mailed statement to CRN, said such a deal is the result of a sequence of mistakes that IBM made in the PC business, particularly in terms of the operating system, which have meant that Big Blue can no longer make money on PCs as a commodity.

For instance, Sun pointed to IBM's contracting of the original PC operating system--then DOS and later Windows--to Microsoft. IBM then worked with Microsoft to develop OS/2, but that project failed. IBM then looked for Red Hat to help in the PC space, but it lost control to that company, the statement said.

Sun also said the deal ratifies Sun's position that the world is no longer PC-centric. "Innovation and customer value will come elsewhere than the PC. The number of intelligent, networked devices other than PCs (PDAs, phones, etc.) will continue to grow and be the mainstream network device," the company's statement said.

"Sun offers low-cost, secure, flexible desktops through its SunRay and Java Desktop System that offer next-generation capabilities compared to PCs, without the PC's security problems, maintenance costs, complexity and forced upgrade cycle," the statement concluded.

Kirk Maier, vice president for LG Electronics' IT Branded Division, based in Englewood Cliffs, N.J., said his company hadn't stated its intention to move into any U.S. PC market abandoned by IBM--should IBM indeed abandon the PC market.

"There would be a lot of things that would go with that, with the infrastructure and everything that goes behind" getting into the U.S. PC business, Maier said. Currently, he said, "there are no plans at all" for LG to enter any void in the market.

A Dell spokesperson said that if the sale of IBM's PC/notebook division goes through, Dell would view it as continuing the consolidation it has been seeing in the industry. At any rate, Dell isn't focused on what IBM and Lenovo are doing, the spokesperson said.

STEVEN BURKE, CRAIG ZARLEY and EDWARD F. MOLTZEN contributed to this story.

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