3 ms·

"We don't need the low end. Let them have it." Didn't the american car companies take that route too? And steel mills. and... mainframes I think.

wisty 14y ago
It doesn't make it a stupid decision. Levano can already take the low end (or Asus will). IBM sells their low-end while it's still worth something, rather than fighting a losing battle.
- spitfire 14y ago
  Then lenovo puts in a few coins into R&D and takes the market slightly up from the low end. Which IBM gladly gives away because the margins aren't high enough... Then Lenovo puts a few more coins into R&D and takes the midrange. Which IBM gladly gives up because the margins aren't high enough... This has happened more than a few times across several industries - American cars, Japanese electronics, mainframe/mini/microcomputers, etc. EDIT: Also see apricot computer. Which did the /exact/ same thing - outsourced the production of it's "commodity" computers, losing its special sauce, and lucrative service contracts. It was gone in a flash. Sir John Harvey-Jones even did an episode of the UK show "the troubleshooter" on them. It's a sure way to make a quick buck this quarter, but horrible long term.
  - wisty 14y ago
    IBM does a little to enhance their x86 line, but I don't think it's of any great value to many customers. If they were making a lot of revenue (not even profits!) off their value-adding, and this value-adding could be applied to their top-end stuff (thus amortised across a larger base), it would make sense. I'm not an expert in IBM servers, but I don't think they are getting a lot of revenue at the bottom-end as a result of their bells and whistles, and it's probably not that easy to transfer those enhancements to their top-end servers.
amac 14y ago
And replaced them with the knowledge economy right. Which has some structural issues right now across the developed world i.e record corporate profits, less than record employment rates.
zmonkeyz 14y ago
and Apple...

wisty 14y ago

It doesn't make it a stupid decision. Levano can already take the low end (or Asus will). IBM sells their low-end while it's still worth something, rather than fighting a losing battle.

spitfire 14y ago
Then lenovo puts in a few coins into R&D and takes the market slightly up from the low end. Which IBM gladly gives away because the margins aren't high enough... Then Lenovo puts a few more coins into R&D and takes the midrange. Which IBM gladly gives up because the margins aren't high enough... This has happened more than a few times across several industries - American cars, Japanese electronics, mainframe/mini/microcomputers, etc. EDIT: Also see apricot computer. Which did the /exact/ same thing - outsourced the production of it's "commodity" computers, losing its special sauce, and lucrative service contracts. It was gone in a flash. Sir John Harvey-Jones even did an episode of the UK show "the troubleshooter" on them. It's a sure way to make a quick buck this quarter, but horrible long term.
- wisty 14y ago
  IBM does a little to enhance their x86 line, but I don't think it's of any great value to many customers. If they were making a lot of revenue (not even profits!) off their value-adding, and this value-adding could be applied to their top-end stuff (thus amortised across a larger base), it would make sense. I'm not an expert in IBM servers, but I don't think they are getting a lot of revenue at the bottom-end as a result of their bells and whistles, and it's probably not that easy to transfer those enhancements to their top-end servers.

amac 14y ago

And replaced them with the knowledge economy right. Which has some structural issues right now across the developed world i.e record corporate profits, less than record employment rates.

zmonkeyz 14y ago

and Apple...