I.B.M. Said to Put Its PC Business on the Market. I.B.M., whose first PC moved personal computing out of the hobby shop and into the consumer mainstream, has put the business up for sale. By By ANDREW ROSS SORKIN and STEVE LOHR. [NYT > Technology]
In another move to show the maturity of what we still call the "high tech" sector, IBM is evidently shopping its personal computer business. I had to stop and think about whether I realized that IBM was still in the PC business. Then I remembered its notebook computer line--which was pretty good the last I looked.
The forecast is for an Asian company to buy the line--the computers are already manufactured there. Then they will probably be marketed through mass merchants. The PC has long since become a commodity item. As long ago as 1988 when the automation company I worked for closed and I was looking for a new business, I considered something in the burgeoning independent PC dealer line. After deeply looking into the situation over a few months, I concluded (rightly in retrospect) that general PC dealers had no future. I still thought that some highly value-added dealers for example CAD and accounting specialists might have some staying power. But they, too, exited in the '90s.
Some "analysts" looking for headlines or politicians scrambling for notoriety may decry this development as another loss to the US and export of jobs to Asia. Don't be fooled. This is just a market maturity issue. Only a few companies can make money in a commodity market. It takes size, focus of the entire company, and a cost structure designed just for that market. It is far better for IBM, and companies in its situation, to go on to other, more profitable products and business.
We're seeing a little of this in the automation business. PLCs are showing signs of commodity business. This is especially true for the traditional, lower functionality controllers. Major companies have been able to integrate more functions into the platform--like motion and information handling--in order to keep profits up. But take a look at the major automation players. ABB, Emerson, GE Fanuc, Invensys, Rockwell and Siemens have all placed more emphasis on higher end software and services business. I'm not as familiar with Honeywell, but I suspect the same is true there.
Meanwhile, there is plenty of money to be made for companies specializing in the control and I/O devices. With the right business plans and proper execution, competition and profits can remain high.
So, the king is dead, long live the king.
6:29:58 AM 
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