IBM has announced that China’s Lenovo Group Ltd. will buy and control IBM’s PC making business for $1.25 Billion. IBM pioneered the PC business 23 years ago and leaves as it views profit margins too narrow to be worth pursuing any longer. Lenovo will take control of the IBM PC business in the 2nd Quarter of 2005.
IBM featured a breaking news story on their site Tuesday evening to announces their PC business acquisition by Lenovo
The key items of the deal between IBM and Lenovo include the following:
- Creates world’s third-largest PC business with approximately US$12 billion annual revenue for 2003
- Global business with worldwide reach, powerful brand name, balanced product offerings and leading R&D capabilities
- Long-term strategic alliances between Lenovo and IBM in PC sales, service and financing worldwide
- Worldwide headquarters in New York; principal operations in Beijing and Raleigh, North Carolina
- Transaction of US$1.25 billion in cash, equity; total transaction consideration of approximately US$1.75 billion
- IBM to take 18.9 percent equity stake in Lenovo; transaction expected to be completed in second quarter 2005.
So what does this mean for current IBM customers?
According to IBM, the company has built its reputation on supporting its customers, and that will not change. In products, in support, in financing, or in quality.
According to IBM the ThinkPad line will maintain the “IBM ThinkPad” branding and the quality will not only be maintained after Lenovo takes control, but will also be improved-upon — bold words for which only time will tell if they are true or not
The IBM ThinkPad and IBM ThinkCenter branding will continue to exist. It will not be changed to Lenovo ThinkPad or Lenovo ThinkCentre. The ThinkPad will still be serviced by the same service group and support organization as they are now, Lenovo will simply buy out the current employees from IBM and they will become Lenovo employees. All warranty services that Business Partners perform on behalf of IBM PCs will continue, so it is business as usual with service support for IBM products.
IBM itself will continue to offer a full range of IBM-branded products to its enterprise and small and medium business clients and in addition to this also offer award-winning products from Lenovo.
In summary, if you are a current IBM PC owner then you should not notice any changes whatsoever.
Down the road IBM claims that “the goal is to build on that experience. To combine the best of IBM and the best of Lenovo into an even higher standard.” It is true that Lenovo is respected for its high-quality products in China, so we hope that the IBM ThinkPad line quality is maintained and innovations continue to occur.
IBM Press Release: IBM Announces Sale to Lenovo Group Ltd.