Wednesday, December 15, 2004

The Lenovo IBM Deal

Wharton School of the University of Pennsylvania posted an interesting editorial on the sale of IBM's PC business to China's Lenovo Group. This is a big announcement for China becoming a dominant player in the world of big business! Hopefully, Lenovo do a much better job in the ever increasing competitive space with leading brand & global distribution network coupled with low cost manufacturing.

But, I wonder, is growth in the PC business over? Has the industry consolidated to the point that these 3-4 brands will only compete for this commodity on price? I doubt it, I think there's still a lot of room for innovation and growth. Broadband access has only begun to materialize and IPv6 is going to pave the way for every device to become networked, a PC-like box/monitor in every room in every house around the world. IBM may have given up a business & platform that it shouldn't have. I guess we'll see.

Where were the major private equity players in this deal? I'm surprised KKR, Goldmach Sachs, Blackstone, Apax, Carlyle, TPG, Silver Lake, or Clayton, Dubilier & Rice didn't get involved.

posted by Charles @ Wednesday, December 15, 2004