IBM avoids front lines of PC industry's price war; but waiting until fall to introduce new models could wound market share
Article Abstract:
IBM continues to avoid the ongoing microcomputer price war by cutting prices only minimally until the company releases a line of low-cost machines in the fall of 1992. The company risks losing a significant portion of its 14.4 percent share of the microcomputer market that brings in $7.5 billion annually. IBM is also working on a major restructuring that could result in plant closures as well as a change in distribution procedures, according to analysts. Some researchers feel that IBM will lose considerable market share if it does not reduce prices immediately to compete head-on with distributors such as Compaq and Dell Computer Corp. Retailers are stating that sales of IBM products are flat or declining as competitors introduce low-end computers and slash prices on existing products. IBM plans a small price cut in Jul 1992 of 25 to 30 percent on most microcomputers, printers and peripherals, but few expect the move to make a significant difference.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
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IBM to unveil new structure of PC business
Article Abstract:
IBM creates IBM Personal Computer Co, an independent operating unit with an annual income of up to $7 billion. IBM officials say that the new unit may become a wholly owned subsidiary company. Stiff competition in the computer industry has forced IBM to reorganize, separating segments of its business into smaller units that can be more competitively managed. The reorganization calls for the reassignment of approximately 1,200 employees from the IBM US sales and marketing operations to IBM Personal Computer. The new unit will employ 10,000 workers and be based in Somers, NY, under the direction of Robert Corrigan. The IBM Personal Computer business plan calls for an 18 percent return on equity and a 10 percent return on assets. Previously, IBM's microcomputer operations were limited in scope, but under the new plan, IBM Personal Computer will develop, manufacture, market and distribute IBM products worldwide.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
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