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What I'm not hearing talked about, in IBM's sale of its PC business...

By Andrew Pollack on 12/08/2004 at 12:19 PM EST

So IBM is selling its PC business. Its in all the press, so you can read the details there. What I don't see much mention of is one of the biggest reasons why this is happening.

Another business partner pointed out that the outsourced firm in Korea which has been doing the manufacture of much or all of these machines for years, is not renewing the contract. Instead, they'll be entering the market on their own. Through doing the work for IBM they've become very good at it, and are now ready to enter the market as a competitor. I seem to recall a similar issue discussed in the book "Airframe" by Michael Chrichton dealing with the aircraft building industry. In any case, IBM wasn't just faced with the question "Do we keep our PC business or sell it?" -- They were faced with building their own manufacturing process, finding a new outsourced manufacturer and moving the entire production capability there, or selling it.

That changes the basis for decision a bit, no?

There are  - loading -  comments....

My own thoughts on this are...By Colin Williams on 12/13/2004 at 12:39 AM EST
I don't know about that - we've got piles of IBM gear and I've never seen "Made
in Korea" stamped on it - its all made in China.
Cringely wrote about this -- he has some intersting thoughtsBy Tiassa on 12/13/2004 at 12:04 PM EST

He masically says that IBM needed to get out of the Wintel PC biz because they
have other fish to fry (like the Power PC processor), also that this gives them
an entry into the Chinese market.

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