> POWER, OS/2, and The Thinkpad has convinced me that IBM just doesn't make the most of what they create.
They are all kind of different.
I used to use Thinkpads and I hated IBM for selling it. But from their point of view it was the absolute right thing to do. High end consumer laptops are dominated by Apple (heck IBM is buying Apple and giving them to all their workers, something like 300K Mac Book Pro's). Everything else is racing to the bottom with thinner and thinner margins. Windows running laptops have to compete with Asus and friends and the money just wasn't there.
Not sure about OS/2 much, don't remember the history. But with POWER, IBM has kind of started to turn around in the last few years.
At some point in the past they have made an explicit choice to not play in the consumer market. Heck, there used to be IBM stores, you'd walk in and buy IBM products like you go to an Apple store now. But they decided they don't want to play in that market (or better or for worse). We'll still see how it ends up working out.
So far it still stays in business after hundreds of years, maybe it just luck or there is something to its business approach. (Fun fact, it used to sell cheese slicers and time tracking devices as well at some point).
OS/2: decent OS, ahead of Windows for awhile, but IBM was never going to go to the mattresses enough to get it the install base it would need to compete with Windows. IBM's dysfunctional PC division didn't help. It would have been nice if IBM kept OS/2 up as a specialty operating system, but I think the overhead costs were too much and Gerstner was, by 1996-1997, very much in a kill-anything-that-isn't profitable mode.
Prior to Gerstner, IBM had a variety of esoteric products which were solely designed as loss leaders, never earned a profit, and relied on subsidies by other parts of the company to stay alive. Post 1993, really starting in 1994-1995 these got killed off or sold off, rapidly.
It wasn't enough to break even, one number I recall being thrown around was that we had to get to a 12% Expense-to-Revenue ratio, ignoring SG&A which was a corporate-wide number. Growth products, products in new markets were exempted entirely or given better targets, but old-line products were held to this magical 12% ratio (I was in the mainframe division at the time, which was grotesquely profitable and even today subsidizes much of the rest of IBM).
IBM got out of selling ThinkPads long before Apple had any kind of dominance in the high-end laptop market.
Arguably they got out of it because there was no such thing as high-end consumer PC hardware, the margins were low, competition fierce, and they didn't want to play in the low-margin discount market.
Arguably the ThinkPad could have been a success as a high end business laptop. I think under Lenovo's stewardship it has languished and become a typical cheap Asian-manufacturer product of 500 SKUs, all slightly different, with quality on a downward curve.
On the other hand the fate of RIM/Blackberry shows there isn't much of a market for a 'business' device that is separate from a high-end 'consumer' device. The latter wins over the former.
rdtsc|10 years ago
They are all kind of different.
I used to use Thinkpads and I hated IBM for selling it. But from their point of view it was the absolute right thing to do. High end consumer laptops are dominated by Apple (heck IBM is buying Apple and giving them to all their workers, something like 300K Mac Book Pro's). Everything else is racing to the bottom with thinner and thinner margins. Windows running laptops have to compete with Asus and friends and the money just wasn't there.
Not sure about OS/2 much, don't remember the history. But with POWER, IBM has kind of started to turn around in the last few years.
At some point in the past they have made an explicit choice to not play in the consumer market. Heck, there used to be IBM stores, you'd walk in and buy IBM products like you go to an Apple store now. But they decided they don't want to play in that market (or better or for worse). We'll still see how it ends up working out.
So far it still stays in business after hundreds of years, maybe it just luck or there is something to its business approach. (Fun fact, it used to sell cheese slicers and time tracking devices as well at some point).
epc|10 years ago
Prior to Gerstner, IBM had a variety of esoteric products which were solely designed as loss leaders, never earned a profit, and relied on subsidies by other parts of the company to stay alive. Post 1993, really starting in 1994-1995 these got killed off or sold off, rapidly.
It wasn't enough to break even, one number I recall being thrown around was that we had to get to a 12% Expense-to-Revenue ratio, ignoring SG&A which was a corporate-wide number. Growth products, products in new markets were exempted entirely or given better targets, but old-line products were held to this magical 12% ratio (I was in the mainframe division at the time, which was grotesquely profitable and even today subsidizes much of the rest of IBM).
cmrdporcupine|10 years ago
Arguably they got out of it because there was no such thing as high-end consumer PC hardware, the margins were low, competition fierce, and they didn't want to play in the low-margin discount market.
Arguably the ThinkPad could have been a success as a high end business laptop. I think under Lenovo's stewardship it has languished and become a typical cheap Asian-manufacturer product of 500 SKUs, all slightly different, with quality on a downward curve.
On the other hand the fate of RIM/Blackberry shows there isn't much of a market for a 'business' device that is separate from a high-end 'consumer' device. The latter wins over the former.
yuhong|10 years ago