

Lenovo Said to Be in Discussions to Buy IBM Server Business - Ecio78
http://www.bloomberg.com/news/2014-01-20/lenovo-said-to-be-in-advanced-discussions-for-ibm-server-unit.html

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salient
This should hit home with those that read the Innovator's Dilemma and
Innovator's Solution. IBM sold their PC business years ago to Lenovo because
of "low margins", and they moved "up-market" to the server market. But now the
PC guys are eating into their profits in the server market, too, and once
again IBM is forced to sell this business due to "low margins".

It's interesting that while it's "low margins" for IBM because IBM has higher
cost structures, Lenovo thinks it's actually a very profitable business:

“Lenovo has been trying to break into servers for a while as a new growth
engine,” Moel said. “It could be good for Lenovo based on the right price.”

This is why Intel will never be safe in the server market, either, if ARM chip
makers eat up the PC market (and they will do that), while also dominating the
mobile market.

