HP aims to pass out IBM

3 Feb 2005

SAN JOSE: Hewlett-Packard (HP) is hoping to capitalise on market uncertainty sparked by the sale of IBM’s PC business to Lenovo and become the No 1 technology company in the world, a senior HP executive said yesterday.

He alluded to growing concern amongst corporate customers about IBM’s strategic vision moving forward following the sale of its desktop and notebook PC division.

In December, IBM agreed to sell its PC business to Chinese computer maker Lenovo for US$1.75bn. Lenovo, the largest PC maker in China and Asia, will become the world’s third-largest PC business, after Dell and HP with revenues of approximately US$12bn and volume sales of 11.9 million units. IBM will hold 18.9pc of the new merged company that would have had combined 2003 PC revenues of US$12bn. Lenovo will be allowed to use the IBM brand for five years and its eventual plan is to sell PCs as Lenovo ThinkPads. Some 9,500 IBM employees will transfer and the new operation will be headed by current IBM senior vice-president, Stephen Ward.

However, it is believed the deal has caused uncertainty amongst corporate customers of IBM unsure about ongoing support and services for destkop PCs.

Ted Clark, senior vice-president in charge of HP’s Mobile Computing Global Business Unit said at a briefing in Silicon Valley yesterday: “The IBM/Lenovo announcement is a great opportunity for HP. Our goal is to regain the No 1 position for notebook and desktop PCs.”

Clark added that once IBM’s PC division passes into Lenovo’s hands “we will be one of the only companies that covers all of the major technology channels worldwide. We are also growing our direct sales business and believe we have hit on a winning formula.

“I believe [the IBM/Lenovo deal] gives us an opportunity to go after enterprise accounts that are beginning to feel exposed as a result. Chief information officers are nervous about the IBM situation.

“As a business we are going to focus on our bread and butter. We cover the entire technology spectrum like no other company in terms of market breadth and knowledge. No other competitor after the changes at IBM has the model to touch us.

“Our attitude is to be the best in class in each segment we operate in, particularly in terms of new opportunities in mobility,” Clark said yesterday.

His colleague Alberto Bozzo, vice-president of HP’s personal systems group for EMEA qualified Clark’s remarks: “We see a lot of companies contacting HP after the Lenovo announcement and asking us to bid for some of the larger deals. This is clear in the number of deals we’ve been able to close recently.

“Large customers want stability and a provider that will be there today and tomorrow,” Bozzo said.

By John Kennedy