Word: ibm
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Dates: during 1990-1999
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...IBM Shrinks Again...
...also the worst of times. For most of the companies that make those computers, that market has suddenly become a lethal place. Once successful companies such as IBM, Compaq, Dell and Apple are floundering; profits are plunging, margins squeezed. Last month one of the personal-computer industry's leading lights -- the pioneering Tandy Corp. -- became a prominent casualty. Faced with $52 million in losses in the past year and an even bloodier future, Tandy decided to abandon the PC business, which accounted for 10% of its sales last year. The company simply could not survive the intense price competition...
...little more than cheap, interchangeable commodities. Since the PCs all use basically identical hardware, consumers are no longer picky about what brand of computer they buy so long as the price is right. The result: retail prices are falling an average of 8% every three months. A fully loaded IBM PS/1 computer with the latest hardware typically sells for $1,699, for instance, in contrast to $1,999 for a similar model two years ago. That is in part because one can order a computer in every way comparable to the PS/1 from a mail-order discounter like Gateway...
Ironically, the price war may have strengthened U.S. computer leadership in some key markets. American firms, which feared a takeover by Japanese firms during the 1980s, have exported their cutthroat pricing to Tokyo with stunning success. Led by IBM, Dell and Compaq, U.S. companies sent shock waves through the Japanese PC establishment by trimming prices up to 30%. While Japanese domestic manufacturers, such as Fujitsu and NEC, have responded with deep discounts of their own, they have been unable to shake off the Americans, much to the delight of Japanese consumers...
...IBM's strategy is both to outpace the competition with unique products such as the ThinkPad notebook PC, and to beat them at their game of discounting. The company has filled practically every market channel with a new line of PCs, including models aimed at homes and small businesses. Next month Big Blue will introduce a bargain-basement line called Ambra that will not carry the IBM logo. The overall strategy has apparently worked. After losing $2 billion in the past two years, IBM's PC business is expected to report a small profit this week. "We're here...