IBM and Lenovo deal creates uncertainty

IBM's recent sale of its PC division to Chinese manufacturer Lenovo has left its European channel uncertain about the implications, according to a report by market analyst Context.

Context has questioned 5,000 European resellers just weeks after the $1.75bn deal was announced.

James Bates, senior analyst at Context, said the channel sees Lenovo as a potential threat to lower-cost PC vendors such as Dell, but doesn't really know what the sale means for it.

"The channel will make up its mind once it can see fully what's going on," he said.

"Most VARs didn't think the deal would be a huge threat to them and remained fairly neutral. However, they did think the agreement would bring cost effectiveness to the channel, and could threaten manufacturers such as Dell and HP [Hewlett-Packard]."

The channel was confident about the consequences for IBM and Lenovo, with 70 per cent of respondents saying the deal will be positive for the Chinese manufacturer and 80 per cent believing it will be "broadly positive" for IBM.

"IBM has never really been seen as a Dell rival before, but the deal could make it one. It will be a launch-pad for Lenovo and a threat to Dell if the cost basis comes down. It would be in Lenovo's interest to get the channel on board," Bates said.

Greg Carlow, managing director of reseller Repton, said resellers tend to take a wait-and- see approach. "Things are never as cataclysmic as they appear. This simply removes IBM?s overhead costs, making the operation more cost efficient," he said.

"Lenovo has done the deal to sell at a lower price and to make more sales. The basic price point will move down."

james_sherwood@vnu.co.uk