IBM seeks buyer for PC business |
http://www.sina.com.cn 2004/12/06 12:32 Shanghai Daily |
International Business Machines Corp, seeking to exit an industry it helped pioneer two decades ago, hired Merrill Lynch & Co to find a buyer for its personal-computer unit, a person familiar with the matter said. IBM is talking with China's Lenovo Group Ltd and the unit may fetch US$1 billion to US$2 billion, the person said. The sale may also attract interest from private equity firms. Edward Barbini, a spokesman for Armonk, New York-based IBM, declined to comment. A sale of the PC business would cement Chief Executive Sam Palmisano's strategy of bolstering profit and revenue by building the company's services business, which ranks No. 1 in the world. IBM is the third-largest maker of PCs, with a market share that is a third of leader Dell Inc. Profit at the unit so far this year was less than 1 percent of sales. "It's a stone around their neck," said Roger Kay, an analyst at researcher IDC in Framingham, Massachusetts. "There's no money. There's no prospect that they'll make any money. They do other things better." The New York Times on Friday reported IBM was considering a sale and said the company was in talks with Lenovo, formerly known as Legend, and at least one other potential buyer. Jessica Oppenheim, a Merrill Lynch spokeswoman, declined to comment. "I know nothing about the deal," said Guo Tongyan, a spokesman for Beijing-based Lenovo. Potential buyers may be attracted by IBM's ThinkPad notebooks. The notebooks are the "most successful" product in the unit, said Rob Enderle, an analyst at California-based Enderle Group. The desktop PC business probably operates at a loss, Benjamin Reitzes, an analyst at UBS AG in New York. The unit reported US$70 million in profit in the nine months ended September 30 on sales of US$9 billion. IBM's share of the global PC market has shrunk to 6 percent, trailing Dell, which has 18.2 percent of the market, and Hewlett-Packard Co, which has 16.2 percent, according to IDC. For IBM, "it is a good move," said Mark Stahlman, an analyst at Caris & Co in New York . "The PC business has been a laggard." Under Palmisano, IBM, which made its first personal computer in 1981, has focused on building its services business into the largest in the world. (Bloomberg News) |