Despite spinoff of PC group, IBM to scale up PC manufacturing

When IBM Corp. spins off its PC design, sales, support and management teams to Lenovo Group Ltd. next year for about $1.75 billion, IBM will retain a 19 percent share in the new manufacturing business.

"There will be a large number of collaborative elements," including IBM research, said Bob Galush, who will leave his vice president post in the IBM PC division to assume a similar role with Lenovo.

"IBM will provide many services" to the new enterprise, which will be located in Armonk, N.Y., with manufacturing as before in Raleigh, N.C., he said. "Lenovo is the No. 1 PC company in China, and it has a very effective manufacturing platform and scale. But its business is desktop, not notebook, PCs so we will make a stronger whole."

Also, Galush said, Lenovo's Chinese products use processors from Advanced Micro Devices Inc. of Sunnyvale, Calif., whereas IBM products have used only Intel Corp. chips.

"Federal buyers should not see a change," he said. "Buyers determine what a manufacturer ships." IBM's hard drive protection system and embedded security will continue in the Lenovo PCs.

Galush said he has already met with existing Army, Navy and Defense Advanced Research Projects Agency customers about the change.

Robert McCann, sales vice president of IBM reseller iGov of McLean, Va., said, "We're a premier IBM partner and will continue to be so. We're not concerned" about the Lenovo sale, set to take place in midyear.

IGov sells IBM products on several governmentwide acquisition contracts including the General Services Administration IT Schedule, the National Institutes of Health Electronic Commodities Store III and NASA's Science and Engineering Workstation Procurement III.

The reseller's most recent deal was an Air Force Standard Systems Group blanket purchasing agreement, signed last week, for IBM desktop and notebook PCs and servers as well as Tablet PCs from Toshiba America Information Systems Inc.