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IBM PC unit sale should be exploited, says Gartner
'Push hard for a better deal'

By Andy McCue

Published: Tuesday 10 May 2005

Businesses should exploit the recently completed sale of IBM's PC unit to Chinese manufacturer Lenovo by bargaining hard for a new deal, according to Gartner.

The $1.75bn deal completed on 1 May makes Lenovo the third largest PC manufacturer worldwide. Gartner said most customers will see little difference but added that Lenovo is under pressure to increase profits to justify the deal.

A research note stated: "Lenovo faces significant challenges, including the need to increase profits by two per cent by the second half of 2006 to fund growth and withstand the expected market downturn, and the need to maintain the quality and system stability for which the IBM brand is known."

While IBM will continue as Lenovo's agent for large account customers Gartner said mid-market PC-only customers that deal directly with IBM are the most likely to be affected - with the level of account control varying widely depending on the individual account executives and Lenovo specialists.

But Gartner's main advice is to take advantage of the situation by pushing for a better deal.

"Negotiate hard, because IBM and Lenovo are anxious for strong sales to justify the deal," the research note said.