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Essay / Research Paper Abstract
A 4 page paper discussing IBM's and Lenovo's reasons for agreeing to the sale of IBM's PC business. Analysts are optimistic about Lenovo's ability to sell IBM PCs despite IBM's inability to succeed with the products. As Dell is experiencing problems and announced in late October 2005 that it would miss sales targets for the third quarter and HP continues aggressive price cutting, Lenovo appears to be well positioned for success with IBM PCs. Bibliography lists 2 sources.
Page Count:
4 pages (~225 words per page)
File: CC6_KSintlBzIBMLeno.rtf
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Unformatted sample text from the term paper:
and Chinas Lenovo announced in late 2004 that Lenovo would acquire most of IBMs PC business; Lenovo closed on the acquisition in April 2005. The merger comes at a
time that is still difficult for US PC makers and makes Lenovo the worlds third-largest PC manufacturer. IBM PCs have been absent from retail stores for years; Lenovo will
begin selling IBM laptops in 1,000 Office Depot stores in November 2005 at prices between $700 and $2,300 (Hamm, 2005). IBMs Motivations IBM
was the original developer of the PC suitable for the business and consumer market, but it was late in entering the market. It had opportunity to set the direction
and structure of the industry early on, but it found itself following rather than leading. It never did recover from that poor start.
IBM sells its products throughout the world and targets business, which has not been eager to abandon its Dell or HP PCs in favor of IBMs. When IBM
began courting Lenovo (Legend at the time) in 2002, it could only report that it had "lost nearly $400 million the previous year" (Roberts and Lee, 2005; p. 74).
The sharp decline in sales was expected following the turn of the new century as many businesses rushed to replace aging PCs with Y2K-ready ones, and predictions held true.
IBM was unable to fully recover, however. Its unit sales increased in 1Q2005 by only 2 percent, compared to Dells 13 percent (Roberts and Lee, 2005).
Lenovo is a Chinese company focusing on the consumer market, primarily in China where it dominates the market with a 26 percent share in 2004 (Roberts
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