IBM Veteran Sees an Opportunity With Lenovo

WSJ.com - IBM Veteran Sees an Opportunity With Lenovo:
New PC Business Chief
To Rely More on Resellers;
Keeping Grip on Customers

By WILLIAM M. BULKELEY and EVAN RAMSTAD
Staff Reporters of THE WALL STREET JOURNAL
December 9, 2004; Page B3

Stephen M. Ward Jr., a 26-year veteran of International Business Machines Corp., suddenly has the job of turning China's Lenovo Group Ltd. into a strong and profitable No. 3 in the global computer market -- something he couldn't do with IBM's own PC business.

As a result of the agreement by Beijing-based Lenovo to acquire IBM's PC business for $1.25 billion in cash and stock, Mr. Ward, who has headed the PC operation inside IBM, will now be chief executive of a public company traded on the Hong Kong stock exchange with combined sales of about $12 billion a year and an indicated 8% market share. As part of the deal, IBM will own an 18.9% stake in Lenovo.

Mr. Ward said he plans to set up a small headquarters in Armonk, N.Y., IBM's hometown, and plans to keep IBM's PC group's 10,000 employees, including the 2,200 in the U.S.

In an interview, Mr. Ward said he expects Lenovo to continue IBM's strategy of trying to develop innovations that will persuade buyers to look at features other than low price when picking PCs. 'Like any product in the world, it's commoditized until someone finds a way to make it better,' he said. He said IBM has had favorable sales results with recent innovations, such as a built-in fingerprint reader for logging on to a PC and a one-button recovery feature for starting up again if a virus shuts down a PC."