Whitebox producers stand firm on IBM/Lenovo deal

Whitebox producers stand firm on IBM/Lenovo deal

The sale of IBM's PC division to China-based, Lenovo, will see another global brand enter the local market, but its impact on whitebox manufacturers is under debate.

With the ink still fresh on the deal, some local producers prefer to play wait-and-see, rather than calling the game early. However, others are cautiously optimistic about how the deal might affect their business.

The consensus, it would seem, is that any attempt by Lenovo to use the IBM name to leverage low-cost computers into the Australian market would see the newly formed enterprise come head to head with Dell, rather than local manufacturers.

General manager of sales and marketing at distributor and systems builder, Altech Computers, Safa Joumaa, does not see Lenovo challenging local OEMs for business.

"Lenovo might put a bit of pressure on the market locally, but it won't bother the small whitebox manufacturers because they have developed their own niche," he said. "Their customer base has already decided not to buy from the big names, and their SMB customers will stay loyal because they get the support. Lenovo will be competing with the big brands, but not with whiteboxes."

Moreover, according to Pioneer product manager, Jeff Lee, a move into low-end computing would defeat the purpose of buying into a high-end brand like IBM.

"Lenovo's representation in Australia is nil at the moment, and they bought a presence into this and other markets," he said. "But if they stick with the IBM structure like they have suggested they intend to, they will stay at the high end of the market with the ThinkPads and products like that. We don't expect them to be a big competitor. They have paid a lot of money for the IBM name and I expect them to protect that."

Like many in the whitebox industry, Lee doesn't expect Lenovo to become a major player locally, at the very least until the company has the opportunity to merge the infrastructure behind both brands.

"Lenovo is good at making cheap product, but it would be not make any sense to use the IBM infrastructure they have just bought to make cheap products," he said. "To be successful on that path they will have to beat Dell, not the whitebox manufacturers."

Plus Corporation managing director, Nigel Fernandes, believes Lenovo may skip the Australian market altogether, in favour of opportunities in larger markets.

"It is going to take a long time to determine how the deal will affect the market locally," he said. "They have already predicted it will take them five years to phase out the IBM name, and chances are they will simply cull less profitable businesses in order to focus on bigger markets."

Fernandes indicated the PC manufacturer may take the Gateway option, and bow out of the Australian market altogether.

"I don't think they want to take Dell on," he said. "There's no money in that end of the market."

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