2004-12-16
I'm Gwen Outen with the VOA Special English Economics Report.
Next year, if all goes as planned, the largest maker of personal
computers in Asia will become the third largest in the world.
Lenovo Group Limited of China is buying the personal computer
business of the American company I.B.M. International Business
Machines brought millions of people their first P.C.'s. Now it is
getting out of the business of selling them. Aggressive competition
in the industry has cut the profit in sales.
The deal is worth one thousand seven hundred fifty million
dollars. This includes five hundred million dollars in debt that
Lenovo will take over from I.B.M. Lenovo will be third in worldwide
sales behind the American companies Dell and Hewlett-Packard.
Ten thousand I.B.M. employees will go to work for Lenovo. The
American company already has thousands of employees in China. I.B.M.
will hold a nineteen percent share in Lenovo. And I.B.M. will
continue to offer services, the most profitable part of its personal
computer business.
I.B.M. helped create the market for personal computers in
nineteen eighty-one with a machine that became very popular. The
computer used an operating system made by a small company,
Microsoft. Another small company provided the microprocessor, the
brains of a computer. That was Intel. Intel and Microsoft grew
highly profitable.
But soon, less costly computers appeared. I.B.M. saw its market
share shrink. In the end, it stopped making its personal computers
itself.
The Gartner research group estimates that I.B.M. had a five
percent share of the world P.C. market this year. Lenovo had two
percent. But it controls one-fourth of the Chinese market, the
largest in Asia. Lenovo was formerly known as Legend Computer.
Members of the Chinese Academy of Sciences began the company in
nineteen eighty-four.
Chinese companies are moving to expand their international
business holdings. This purchase is one of the biggest yet. Lenovo
will be able to use the I.B.M. name for five years.
Lenovo will have the headquarters of its personal computer
business in New York, with operations in Beijing and Raleigh, North
Carolina. Stephen Ward will be the chief executive officer and Yang
Yuanqing will be the chairman. Officials expect the deal to be made
final by the middle of next year.
This VOA Special English Economics Report was written by Mario
Ritter. I'm Gwen Outen.