In a similar vein IBM will sell its personal computer business to China's Lenovo Group because IBM can make more money on things like consulting than on PCs.
Since the merger of Lenovo and IBM PC, the company has striven to blend the two into a single culture.
Lenovo buying IBM's Thinkpad line of computers is one such example, Geely Holding Group's recent acquisition of Swedish car maker Volvo is another.
Within its bowels, Lenovo has some of the DNA of the old IBM, the US firm from which Lenovo bought the enterprise PC division in the mid-2000s.
When Lenovo bought the IBM PC division, the Chinese company sold pretty much just PCs in China.
With rare exceptions, notably Lenovo, which purchased IBM's laptop business, and Haier, the maker of cheap, small refrigerators that furnish the rooms of numberless students, Chinese names have failed to make much of a dent.
This council has been meeting for decades, if one grants that it is essentially the same under Lenovo as it was under IBM, which sold its PC division to the Chinese company in 2005.
Our results show that Lenovo's acquisition of the IBM PC business has become a success.
Lenovo also has installed an old ibm hand, Rory Read, to the new position of president and chief operating officer.
It purchases products from over 100 OEMs, including Hewlett-Packard, IBM, Intel, Lexmark, Xerox, Lenovo Group and Microsoft, and delivers them to 15, 000 value-added resellers, corporate resellers, government resellers, system integrators, direct marketers and retailers.
Or will they sell the business off, as IBM did when it sold the ThinkPad business to Lenovo?
In addition to the global economic downturn, the botched integration of IBM's PC business has been weighing on Lenovo's results.
Some analysts have speculated that the hardware business could be sold off to an Asian handset buyer in a deal analogous to IBM's sale of the ThinkPad unit to Lenovo.
But the successful purchase of IBM's PC computer arm by Chinese computer company Lenovo shows another model.
Lenovo bought International Business Machines' (IBM) personal computer business in 2005.
Formed by Lenovo Group's acquisition of the former IBM Personal Computing Division, the company develops, manufactures and markets reliable, high-quality, secure and easy-to-use technology products and services.
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In the past, Lenovo has purchased systems companies IBM PC Division in 2005, German computer maker Medion in 2011 but never a pure-play software firm.
Formed by Lenovo Group's acquisition of the former IBM Personal Computing Division, the company develops, manufactures and markets reliable, high-quality, secure and easy-to-use technology products and services worldwide.
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In fact, at the time of the IBM ThinkPad acquisition, the China business was 37% of total Lenovo revenues, so the China sales out of the global revenues by Q4 fiscal 2009 had actually increased nearly 10%.
American William Amelio was hired with much fanfare in late 2005 to take charge of Chinese computer giant Lenovo--and integrate that company's acquisition of ibm's mammoth but moneylosing PC business.
Analysts put the switch in the number two slot down to a decision IBM made in 2005 to sell off its PC business to Chinese manufacturer Lenovo to concentrate on software and services.
Hewlett-Packard failed to see the threat from IBM (NYSE:IBM), Apple Inc. (NASDAQ:AAPL), and Lenovo.
It should be noted that IBM exited the PC business years ago when it sold off its product line to Lenovo.
Meanwhile Samsung and Apple are leading in tablets and smartphones, while IBM has successfully positioned itself as a software giant after selling its PC unit to Lenovo.
And companies such as Panda Electronics, Huawei Technologies Haier Group, Little Swan, and Lenovo are developing new products becoming the next Cisco, IBM, and Apple.
Lenovo's purchase was motivated by the benefits it could receive by accessing IBM's intellectual property in the design and production of top of the line PCs.
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