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eewiz
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Mistake by IBM
eewiz   7/11/2013 10:19:10 AM
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Lenovo seems to be doing pretty well with the PC business. In retrospect, selling it cheaply was a bad move by IBM.

 

mcgrathdylan
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Changing of the guard
mcgrathdylan   7/11/2013 10:21:31 AM
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So, Lenovo has come full circle to become the largest PC vendor in the second quarter. Can the company maintain this lead? Given the slowdown in China and the evidence that HP has some new systems in the pipeline, can HP get back on top?

junko.yoshida
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Re: Changing of the guard
junko.yoshida   7/11/2013 11:45:09 AM
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In China, Lenovo is definitely one of the most respected companies among high-tech firms, with its investment in R&D and solid management. While Lenovo also has big ambition for mobile handsets, I think they have a good staying power in the PC market.

mcgrathdylan
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Re: Mistake by IBM
mcgrathdylan   7/11/2013 12:07:47 PM
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I wonder if IBM would truly agree that it was a bad move. Lenovo has done very well with the business, but even so we know the margins are razor thin. We know that PC sales are on a downward trend that likely is not going to be reversed. IBM got out, and I don't know that the company has any regrets about that.

Warren3
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Re: Mistake by IBM? Nah
Warren3   7/11/2013 1:12:41 PM
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I too feel that IBM has better plans for investment and generating revenue. I also feel that the real story here is about Dell; positioning itself well for success if/when the market segment expands. Delays in getting their ownership and management plans sorted out won't help their efforts any but the numbers look good.

goafrit
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Re: Mistake by IBM
goafrit   7/11/2013 3:23:25 PM
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Not sure if IBM sold it cheaply. The fact is that an Asian firm can live with low margin while an American firm may find that difficult

goafrit
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Re: Changing of the guard
goafrit   7/11/2013 3:25:56 PM
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>>  Can the company maintain this lead? Given the slowdown in China and the evidence that HP has some new systems in the pipeline, can HP get back on top?

HP does not need to get back on top. They should focus less on number shipped to margin obtained. It is like airline business. You can fill 5 seats at the economy but one business class can make all the difference. Sure, Wall Street will like that the other carried 5 people while you have one passenger. But in your books, you look better. HP may be unable to catch Levono in  volume, but they can still lbe more profitable in that sector.

goafrit
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Re: Changing of the guard
goafrit   7/11/2013 3:27:22 PM
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>> I think they have a good staying power in the PC market.

A recent piece about the company in one of the leading global magazines shows that they still believe that PC has a place in the future. This is a company that is efficiently managed and can generate innovations just as their Western peers.

goafrit
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Re: Mistake by IBM
goafrit   7/11/2013 3:29:44 PM
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IBM made the best decision as they have focussed on more lucrative business segment. I do not see the reason why they need to regret. The data analytics, Smart Cities,  Walton etc are future markets that could be bigger than PCs.

DMcCunney
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CEO
Re: Mistake by IBM
DMcCunney   7/11/2013 3:33:02 PM
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If I were IBM, I wouldn't regret getting out.  They got out in the first place because they couldn't make money, and the fundamentals that made them bail haven't changed.

PCs are commodities, with commodity pricing and razor thin margins, where the lowest cost producer wins.  IBM has never been the lowest cost producer in any market.  And the PC market is largely retail, and IBM has always been a B2B supplier, and never really understood retail.  (Their attempt years back to have their own retail stores was a notable failure.)

Lenovo understands retail and can be cost competitive, so it's not a real surprise they reached the number one position.

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