Users say IBM PC division sale a reflection of the times

They're concerned that the quality of IBM's hardware will drop

LAS VEGAS -- IBM's decision to sell its PC division to a China-based company prompted a range of reactions today from technology users, from disappointment to a belief that the move reflects the times and the impact of globalization. The company and China's Lenovo Group Ltd. announced today that Lenovo has agreed to acquire IBM's personal computing division for $1.25 billion in cash (see story).

Sidney Soberman, director of technology systems at The H.W. Wilson Co., a Bronx, N.Y.-based publishing company, called the sale "an indication of the direction IBM is going: They are getting out of the hardware business."

An IBM laptop user, Soberman said the company's PCs are very durable and, in his experience, never break down. With the purchase, "I would tend to think the quality of the notebooks will decline," he said.

Soberman and other users who commented on the sale are attending the Computer Measurement Group conference, an organization of IT professionals who measure performance and manage systems.

Ike Hunley, a systems programmer at Blue Cross/Blue Shield of Florida, was dismayed by the sale, which he called "just more selling off of America ... piece by piece. More likely, it will be more jobs that are gone. It's not going to do anything for citizens here."

"It really is an American icon, and to see that get sold off to a Chinese company is kind of disappointing," said Steven Gedwillo, a resource manager at Omaha Woodmen Life Insurance Society in Omaha. He said he has mixed feelings about the decision.

While IBM was a PC hardware pioneer, Gedwillo said PCs have now become commodities. He called the sale "an indicator of a company that is looking forward."

Rob Enderle, principal of Enderle Group in San Jose, believes the deal will hurt IBM in some markets, especially with federal government customers who may balk at buying from a company whose backers include the Chinese government. "Lenovo is about as far away from a company they would consider buying from as you would get," he said.

But the sale may also create questions for U.S. corporate users about IBM's commitment to its hardware, Enderle said in a telephone interview. "The question is going to be, What goes next?"

In 2002, IBM sold its disk drive business to Hitachi Ltd., and Enderle said he expects Lenovo will try to compete against IBM's Intel-based servers, which it may be able to sell at a lower price.

Daniel Menasce, a professor of computer science at George Mason University in Fairfax, Va., wasn't surprised by the sale. "The profit margin on PCs is really very slim," he said. "IBM makes its money on selling solutions to its customers."

Copyright © 2004 IDG Communications, Inc.

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