Is IBM saying good-bye to the PC business it helped create more than two decades ago? According to published reports, Big Blue is poised to exit the business it launched in 1981 when it unveiled the innovative IBM XT. Now, all these years later, the world's largest computer company is reportedly looking to sell off its notebook and desktop product lines to a Chinese PC maker for an estimated $1 billion to $2 billion.
Officially, IBM is saying very little. When asked about the deal Friday, company officials reiterated what they often say about stories such as this -- that it is company practice not to comment on rumor or speculation. Yet selling off its PC business isn't coming as a total shock. Company officials have admitted that they have studied the idea from time to time, and industry analysts view it as a logical step for the IT giant.
For some time now, IBM has languished a distant third in the PC space, with 5.6 percent of market share. That's well behind leader Dell and second-place Hewlett-Packard. And despite top-notch, innovative technology, exemplified in its ThinkPad notebooks, IBM has not been able to compete effectively in a market that has largely gone commodity.
"The PC market is driving toward optimal efficiency in manufacturing, so companies like Dell do extremely well because its supply chain is so efficient that it can be profitable even when margins are thin," says Mark Margevicius, an analyst at Gartner. "IBM made lots of progress here, but they are not anywhere near best of class."
Many VARs, including those who have sold or currently sell ThinkPads but who look to other products for their profits, agree with the assessment.