Chipping Away At Intel

The personal-computer business has been good to IBM this year. Sales have soared, and the IBM PC Co. has taken back lost market share. But no matter how well IBM does in PCs, it's still tough to make money. Intel Corp. and Microsoft Corp. profit handsomely from near-monopolies in basic PC technology, but PC makers have seen net margins plunge from 8.1% to 3.9% since 1987, according to McKinsey & Co. "The truth is that we've become little more than assemblers," says IBM exec Nobou Mii.

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