ThinkPads have been my favorite laptops for a long time. Smart design, reliability, and the best keyboards in the business meant that when I picked a notebook for my own use, it was usually one of IBM's iconic black boxes. So the news that IBM (IBM), which did so much to create the personal computer, was selling its PC operations to China's Lenovo left me saddened.
Nostalgia aside, many ThinkPad buyers may be concerned about the future. IBM is a familiar partner of Corporate America. What does the shift in ownership to a company partly controlled by the Chinese government mean? Will ThinkPad quality suffer? How much confidence will there be among corporate customers, whose purchasing decisions often commit them to buying the same products for the next 18 months or more? After discussing the deal with top executives of the new Lenovo, I'm cautiously optimistic. ThinkPad should remain the product it has been and, if we are lucky, could return to being the innovator it once was.
In financial terms, the deal looks like a straightforward purchase of IBM assets by Lenovo. Functionally, IBM looks more like the buyer. Operations will be based in Research Triangle Park, N.C., near the division's current home, and most operating execs will be IBMers. Among the assets going to Lenovo are all IBM's PC design facilities, including an innovative lab in Yamato, Japan. In addition, Lenovo either acquires outright or gets licensing rights to a large portfolio of IBM patents, a development that may encourage the Chinese to start being more respectful of intellectual property rights.
THE CHANGE IN THINKPAD'S nationality may not be significant in terms of production issues. Most ThinkPads will continue to be built in an IBM-owned plant in Shenzhen, China. Furthermore, the competing products from Dell, Hewlett-Packard, and others are built by Asian contract manufacturers, mostly in China. My bet is that Lenovo will maintain the quality that ThinkPad customers have come to expect, while IBM takes care of customer service and support.
The future of product design is less clear. IBM didn't invent the modern laptop, but the company played a huge role in perfecting it, and a hallmark of the glory days was a willingness to experiment. Some products, such as the ThinkPad 701C, with its expanding "butterfly" keyboard, were critical successes that didn't sell well. Others, such as the thin ThinkPad 600 of 1999, were commercial winners that redefined their markets. But in recent years, IBM's PC group has struggled as a low-margin business in a high-margin company, starved for investment funds and unable to take a chance on interesting products with no assured market.
Could Lenovo revive risk-taking and experimentation in business laptops? Strong forces are working against this. The business has matured. Dell's (DELL) determination to keep R&D outlays to a minimum and relentlessly squeeze out costs isn't going away. Neither is a corporate purchasing process that has pushed Dell, H-P (HPQ), and IBM to offer models with similar designs and mostly identical features.
Most of the recent design experimentation in business laptops has come from sideline Asian players, including Acer, Fujitsu (FJTSY), and Panasonic (MC), not the Big Three. Lenovo seems unlikely to blaze new trails. Still, the company will have a ton of design talent and, perhaps, the freedom to innovate.
As a U.S.-Chinese business partnership, Lenovo is a leap into the unknown. The Chinese owners could let quality slide. The American executives who built ThinkPad could drift away. But so far, the top managers of the new Lenovo seem excited to be escaping the IBM yoke for a company focused on PCs. So I believe we can still buy ThinkPads with confidence -- and maybe we'll see better things in the future.
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By Stephen H. Wildstrom