IBM sold its personal computing division to Chinese manufacturer Lenovo (previously called Legend) in 2005, divesting itself of a product line they could not make a profit from. After this weeks announcement that the IBM brand will be dropped, the brand that arguably launched the whole PC more will be consigned to history.
With the power of the Chinese economy behind it, and a cadre of ex-Dell executives at the helm, Lenovo has defied many of the early predictions and increased market share in almost all markets after the acquisition. It has managed to retain the global PC sales third place handed over to it by IBM, even though Acer now threatens that post its Gateway acquisition.
Asia already controls the majority of the manufacture of the worlds PC’s, while Dell still manufactures PC’s in the US, it is the only manufacturer to still do so, and laptops for the US come out of their Malaysian factory. Now Asia is staking a credible claim for the Brand control and strategy of the PC market as well.
Dell and, to a lesser extent, HP need to get their support in order to enable them to maintain any clear lead on the up and coming Lenovo and Acer. At the moment, the biggest flaw in both Lenovo and Acer’s strategy is that they lack a complete and credible product line. While they both have some server products, neither of them are geared to service the enterprise needs of customer yet with a comprehensive server, storage and services package. I would bet money that they are working on it though. Servers are not that hard to put together now, and Dell has proven that its possible to build market share quickly in this area. As for storage, both Dell and HP partner to get their top end centralised storage and this is a highly copy-able strategy. There will be some waves in the market in the next couple of years.