IBM Sells PC Unit to Lenovo

news
Dec 10, 20042 mins

Companies say customers will see no change in product availability and support during transition

Marking the end of an era, IBM last week sold its PC division to China’s Lenovo Group for $1.25 billion. The deal instantly crowns Lenovo as the world’s No. 3 PC maker. As part of the agreement, IBM will also take a 18.9-percent stake in Lenovo.

IBM and Lenovo said customers will see no change in product availability and support during completion of the deal or afterward, as PC operations of the two companies are integrated.

“Lenovo products will be co-branded for the next few years to leverage the power of the IBM ThinkPad brand with our existing and future customers,” said Mark Loughridge, chief financial officer of IBM.

IBM is getting out of the PC manufacturing business because it sees greater profits in the services market, Loughridge said.

Beyond the integration, the impact of the deal is less clear, especially for enterprise customers. IBM ThinkPad notebooks enjoy a strong reputation among corporate customers, who are impressed by its security and reliability features.

However, IBM and Lenovo have an uphill battle on their hands as they try to convince corporate customers that the ThinkPad of tomorrow will be just like the ThinkPad of today, said Stephen Baker, director of research at NPD Techworld.