Category Archives: IBM

Smartphones jump the shark with Lenovo deal

moto-xNeed more evidence that smartphone prices are about to tank? Look no further than Lenovo’s announcement on Wednesday to buy Motorola from Google for $2.9 billion. While the deal gives the Chinese company its long desired presence in the Western smartphone market, it also represents a looming commoditization. The rule of thumb with Lenovo is: when the company comes knocking, your product is probably about to jump the shark, if it hasn’t already.

Lenovo’s most famous purchase came in 2004, when it announced it was buying IBM’s PC division and ThinkPad brand for $1.7 billion. PCs were already commodified by that point, with prices and profits going nowhere but down. IBM wisely saw the writing on the wall and got out while the getting was… well, not good, but at least doable.

The question everyone was asking was why would anyone want to buy a sinking ship? Lenovo’s executives had a simple answer: they wanted to become China’s first international brand. The profit margins on PCs were shrinking, but everybody still needed them, so what better way to familiarize the world with the Lenovo brand than with a ubiquitous product? Read the rest of this entry »


Posted by on January 30, 2014 in Google, IBM, Lenovo, mobile, motorola


PCs: a tale of two divergent companies

Two decades ago, there were a pair of names that really mattered in the computer business: Microsoft and IBM. With the benefit of hindsight, it’s incredible to think about how divergent the paths of the two companies have been, especially in light of a new report that shows already-slowing PC sales are about to drop off a cliff.

Tracking firm IDC originally thought PC shipments would be down just 1.3 per cent this year, but after seeing a free-fall in the first quarter, that estimate has now been revised to a 7.8-per-cent decline in 2013. As PC World puts it, that’s “full-blown hemorrhaging.”

The culprit, of course, is mainly mobile - more people are doing more on smartphones and tablets and are forgoing buying a new PC until they really, really have to, if even then. No wonder that if PC vendors such as Dell, HP and Lenovo aren’t already in a lurch, they’re scrambling to get out of the business. Desktops and laptops may still be useful, but the truth is they’ve been as commoditized as toasters for a while now. Read the rest of this entry »


Posted by on May 29, 2013 in IBM, microsoft


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