[opendtv] Re: IBM out of the PC business

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Mon, 6 Dec 2004 08:37:12 -0500

At 1:23 PM -0500 12/4/04, Kon Wilms wrote:
>Schwartz has made this kind of comment before - as a way to downplay the
>shipping out of manufacturing to sweatshop factories in the east. Maybe
>he will give himself a nice bonus and fire *cough* retrench a few
>thousand workers when the deal goes through.

Nice try Kon, but it doesn't wash.

In the glory days of the PC growth curve, people were upgrading at 
18-24 month intervals. PC shipment volumes were growing at double 
digit rates for more than a decade.

Now a PC can easily work for five years or more, and companies are 
much more conservative about upgrading. And the only segment of the 
"home" market that is still driving upgrades is the gamers.

As for wireless phones and PDAs, the growth rates and replacement 
cycles look more like the old PC business, except for one VERY 
IMPORTANT factor. The phone guys have built product replacement into 
the business model. We expect to get a new handset every few years, 
knowing full well that we are paying for our NEXT handset every 
month. The same thing is happening (although the replacement cycle is 
longer) for the digital STBs needed for cable and DBS services.

IBM does not need to compete in the commodity marketplace...they make 
far more money by adding value to computing services.

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