Friday, December 3, 2004


Big news like during the days when Japanese companies were initially buying out U.S. companies. The yellow scare is coming! Wait, how come no one really stated anything when LG Electronics bought American icon Zenith years ago? Guess Korea a decade ago wasn't big enough for some people or a real threat.

Oh, My God! The Chinese Are Coming!
They're buying IBM's PC business. What's next—McDonald's?

By Daniel Gross

Friday, Dec. 3, 2004

The New York Times has a genuine scoop today. IBM, which introduced its widely cloned personal computer in 1981, has put its PC business on the block. The news is not earth-shattering. PCs are a small business for IBM—the unit is expected to fetch between $1 billion and $2 billion, while IBM has a market capitalization of $162 billion. IBM lags far behind market leaders Dell and HP. And personal computers are a brutally competitive business, with Twiggy-like margins. What was once an expensive luxury has become a cheap commodity, propelled in large part by the rise of Taiwan and China as component manufacturers.

The surprise in the Times story is the potential buyer. IBM most likely won't be selling the unit to an American competitor or to a Japanese rival like Fujitsu. Instead, Andrew Ross Sorkin and Steve Lohr report, the likely buyer is Lenovo, China's biggest PC maker. (Lenovo used to be known as Legend.)

It's not just PC businesses that Chinese companies are bidding for. Huawei Technologies, China's answer to Cisco Systems, has also been shopping in the United States. The Wall Street Journal reported a couple of weeks ago that Wanxiang, China's largest auto parts company, has acquired or set up joint ventures with several small struggling Midwestern companies. It now employs about 1,000 Americans. (full article)

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