Lenovo/IBM close deal as PC industry undergoes shake-up

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China’s Lenovo Group has closed the deal to purchase IBM’s PC division for $1.25 billion, creating the world’s third largest personal computing company.

Lenovo expects its combined annual PC revenue to reach $13 billion, representing a four-fold increase from the company’s current PC business.

Nevertheless, latest findings by IDC show that Hewlett-Packard (HP) has replaced Lenovo as the leading PC vendor in Asia-Pacific, excluding Japan.

IDC said HP sales rose 29 per cent in the region, lifting its market share up from 10.2 per cent to 11.7 per cent. Lenovo registered a 20 per cent rise in Q1, and remains #1 in China, but its Asia-Pacific share slipped to 11 per cent from 13.5 per cent.

IBM meanwhile, which will take an 18.9 per cent stake in the Chinese company, is restructuring its operations in a widely anticipated move, cutting between 10,000 and 13,000 jobs, mostly in Europe.

As a result of the cuts, which will affect between 3 -4 per cent of IBM’s 329,000-strong workforce, the company said it expects to incur a Q2 charge of between $1.3 billion and $1.7 billion.

In a release, it added: "As a result, IBM will create a number of smaller, more flexible local operating units in Europe to increase direct client contact."