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After IBM's PC Unit Goes Chinese, Will Carly Now Sell HP's PC Business?

Gartner analyst: "IBM was smart to get of this early"
By Jeremy Geelan
Article Rating:
December 9, 2004 12:00 AM EST
Reads:
 11,711
  • SYS-CON Live Coverage of HP - via Google News

    Reuters is carrying a report that quotes Gartner Research analyst Martin Reynolds, saying that "IBM was smart to get of this early."

    The "this" in question? The PC business.

    Reynolds was commenting on the day that IBM disposed of its PC division in a complex inter-company deal with China's top PC manufacturer, Lenovo Group Limited.

    His belief is that, with the IBM-Lenovo deal now public knowledge,  Hewlett-Packard Co will be under pressure to sell its personal computer business: "HP is now on the spot to show why their PC business is a strategic part of the company," he told Reuters.

    IBM, Reynolds believes, has achieved with the PC unit sale "more freedom to focus on its IT consulting, chip design and services businesses" - while the remaining PC manufacturing giants like Dell and HP are left to compete over increasingly slim profit margins.

    "IBM is sending a clear message that it doesn't think building, designing, manufacturing and promoting PCs is strategic to its enterprise business," Reynolds told Reuters.

    HP, however, tells Reuters it has no plans to follow IBM's lead: "HP has been and continues to be committed to the PC market," HP spokeswoman Tiffany Smith said in a statement - and HP's share price was largely unaffected by yesterday's IBM announcement.

  • SYS-CON Live Coverage of HP - via Google News

Published December 9, 2004 – Reads 11,711
Copyright © 2004 Ulitzer, Inc. — All Rights Reserved.
Syndicated stories and blog feeds, all rights reserved by the author.

More Stories By Jeremy Geelan

Jeremy Geelan is Sr. Vice-President of SYS-CON Media & Events. He is Conference Chair of the worldwide Cloud Expo series, of the Virtualization Conference series, and of the uppcoming UlitzerLIVE! event. He's founder of Cloud Computing Journal, Web 2.0 Journal, AJAX & RIA Journal and other leading SYS-CON titles. From 2000-6, as first editorial director and then group publisher of SYS-CON Media, he was responsible for the development of all new titles and i-Technology portals for the firm. Today he has complete responsibility for the content of SYS-CON's entire portfolio of Events. He regularly represents SYS-CON Media & Events at conferences and trade shows, speaking to technology audiences both in North America and overseas. He is executive producer and presenter of "Power Panels with Jeremy Geelan" on SYS-CON.TV.

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Most Recent Comments
hp_blogger 12/09/04 09:51:35 AM EST

Once the chinese get a handle on what they are doing here, they will further commoditize the consumer PC, driving prices for consumer PCs....where HP has a good presence in China now...down, making it impossible for HP to compete in these markets and eventually forcing it out of the consumer PC markets here, IMO. Concurrently, Dell will continue to put pricing pressure on the US corporate PC markets where it dominates, again making it difficult...nay, impossible...for HP to make money here.
yellows2121 12/09/04 09:48:59 AM EST

HP says it considered break up several times
hpinvert 12/09/04 02:48:41 AM EST

HP has, in the past, exited businesses that were becoming commodity items and the margins were getting too small. Why not now?
oldredstillhunts 12/09/04 02:47:36 AM EST

After the Lenovo deal PCs are now a whore's market. You think DELL has put pricing pressure on PCs? Wait until Chinese slave labor sets new price points. Carly will be running in circles like she is wearing pantyhose two sizes too small.
bob5544332211 12/09/04 02:33:24 AM EST

Does anyone know how much of HP's PC product is currently manufactured/assembled in China & outside the US? The last custom laptop PC I ordered from HP (last week) shipped from Shanghai China.

What about Dell?

IBW (before the sale)?

Will this IBM move really put downward pressure on PC prices? Don't the current prices already reflect oversees manufacturing costs/savings?