Two weeks ago, IBM agreed to sell its PC business to Lenovo, a Chinese company formerly known as Legend. However, there is no need for buyers to panic.
In the short term — 18 months to three years — it should be business as usual. The next generation of ThinkPad portables should arrive on schedule, including the X41, following the current roadmap. As for the long term — beyond five years — we can only wait and see.
If you buy a ThinkPad in the United Kingdom today, you get the results of American design and business expertise combined with technology and research from IBM’s development team in Japan. The machine itself will probably have been assembled in an IBM joint-venture factory in China.
When the deal goes through next year, the same people will do the same things in the same places, under the same leadership, but with different ownership. The people in Raleigh, North Carolina, Japan and the UK will be working for Lenovo, rather than IBM.
The leadership will be the same because Steve Ward Jnr, who runs IBM’s worldwide PC business, will become Lenovo’s CEO. Since IBM will have an 18,9% stake in Lenovo, he should get IBM’s continued cooperation and support.
In any case, as part of the deal, IBM will continue to specify IBM-branded PCs (made by Lenovo) for internal use, and they will be the recommended option for all the companies that IBM supplies.
What happens later is, of course, anybody’s guess. Lenovo will have the right to use IBM’s name and brand names for five years.
Gareth Hansford, director of IBM’s UK personal computer division, says: ”There’s no reason why that shouldn’t be renewed.
”But the decision has to be taken: do we have two brand names or one? There is a desire to bring the Lenovo brand into play outside China.”
Hansford thinks that badging machines something like ”IBM by Lenovo” is a possibility.
But we can be sure the Lenovo name will start to appear, for two reasons. First, it is evidently Lenovo’s desire to become a global supplier, rather than focus on the local Chinese market, so it has to establish a global brand name.
Second, there are holes in the product line. Lenovo will take over IBM’s desktop and portable PC businesses, but, as Hansford points out, this doesn’t include servers , printers or retail business.
Hansford emphasises that the current deal prevents Lenovo from selling servers outside China and Japan, but I can’t see this restriction making it into the next one.
The question is, will it work? Brian Gammage, vice-president and research area leader at Gartner, says: ”It looks like a good deal for everybody concerned. Lenovo is strong in China and nowhere else, so the assembly of the two organisations looks to be complementary.” — Â