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Lenovo To Outsource Notebook Production

post #1 of 7
Thread Starter 
First the venerable Thinkpad went from being an American classic to what some considered was a foreign knock-off. Now this?

http://news.digitaltrends.com/news/s...ook_production

Quote:

In an unusual move, China-based Lenovo—which took over IBM's ThinkPad line a few years ago—has announced it will be outsourcing production of all its notebooks to trusted manufacturers, rather than producing the systems itself in China. The unusual twist: those trusted notebook manufacturers are in Taiwan.

Traditional wisdom holds that the cheaper Chinese labor market would make it more cost-efficient for Lenovo to keep its manufacturing in mainland China. However, according to Taiwanese media, Lenovo feels that shifting manufacturing to Taiwan will save on inventory costs and shorten delivery times to market, as well as save on labor costs.

Lenovo currently works with Taiwan's Compal Electronics, Inventec Corp., Quanta Computer (which also manufacturers to a myriad of computer makers, including Apple and Dell, and also builds the OLPC XO notebook), and Wistron Corp. However, Lenovo apparently intends to eliminate one of these suppliers to achieve better economy of scale.

Earlier this month, Lenovo announced its IdeaPad line, its first line of notebook computers aimed at consumers
post #2 of 7
What does it mean "took over IBM's thinkpad.."?
post #3 of 7
Thread Starter 
Quote:
Originally Posted by Skillz View Post
What does it mean "took over IBM's thinkpad.."?
Lenovo purchased all of IBM's laptop lines a few years back.
post #4 of 7
Quote:
Originally Posted by ilCacciatore View Post
Lenovo purchased all of IBM's laptop lines a few years back.
So Lenovo owns IBM or just owns the rights to sell IBM laptops or what? I'm a little lost.
post #5 of 7
Quote:
Originally Posted by Skillz View Post
So Lenovo owns IBM or just owns the rights to sell IBM laptops or what? I'm a little lost.
just their notebook division.
post #6 of 7
Thread Starter 
Quote:
Originally Posted by Skillz View Post
So Lenovo owns IBM or just owns the rights to sell IBM laptops or what? I'm a little lost.
Yeah, IBM sold off the asset that was their PC Division (also consumer/business desktops, but the really valuable part was the notebooks) to Lenovo 3 years ago in 2005. Lenovo now makes the ThinkPad and all other (what previously were) IBM PCs/Notebooks. IBM continues to run server, programming, IT, IP, management consulting, business consulting, product development, and several other divisions.

Think of it this way: For 20 years you own and run a very successful business. It began as Skillz's lemonade stand, but eventually evolved into a full blown restaurant with breakfast, lunch, and dinner. You still operate the small lemonade stand, which is still very profitable, but your restaurant business has grown to be your main concern and you really would like to focus exclusively on the food portion of your business. But since the lemonade stand out in front of your business is still viable and won't compete with your restaurant, you see no reason to close it. So what do you do? You sell it. You sell the stand, the right to call it Skillz's lemonade, the recipe, the customer list, etc. And the owner takes it over and runs it much the same as you did. He gets a profitable business and brand name and you get $ today to put into your restaurant and now can focus on it exclusively. Everyone wins.

(Except maybe the consumer if the new owner of Skillz lemonade cuts corners, has bad service, or screws with the recipe. Or in the case of ThinkPad notebooks.... outsources production).
post #7 of 7
Oh I see now. That's interesting, I had no idea that had even happened.
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