Is a Chinese ThinkPad Still a ThinkPad?

Anne Kandra is a contributing editor for PC World. You can send her e-mail at consumerwatch@pcworld.com.

Photograph by Will McIntyre

Rob Perlstein loves his ThinkPad. In fact, he's been so satisfied with IBM's popular notebook line--and with the company's highly rated service and support--that he owns three systems, and he's always recommended them to his friends and family members.

But now the happy relationship is over for Perlstein, owing to IBM's sale of its PC division to Lenovo Group (click here for details). "When I heard [about the sale], my first thought was to call IBM and say 'Don't do it!'" recalls Perlstein, a registered nurse anesthetist who lives in Asheville, North Carolina. Perlstein considered snapping up one more ThinkPad before the final changeover, but decided against it. "Too many unanswered questions," he says. "Who's going to end up covering the warranty and technical support?"

Perlstein's concerns are shared by plenty of other IBM customers who are wondering what to expect after Big Blue relinquishes its PC operation to the leading Asian computer maker. Furthermore, the IBM/Lenovo sale illustrates an important trend--the increasing prominence of the Chinese in the technology industry.

New Deal, Old Ways?

While some IBM customers are taking a wait-and-see approach, others, including Perlstein, have already decided to make a break. "It won't be the same," he predicts. "The new company will want to compete on price, not quality."

IBM disagrees with Perlstein's analysis of the situation. Big Blue says that things will stay the same for existing customers--at least in the immediate future.

The sale, which makes Lenovo the third-largest PC company worldwide (trailing Dell and HP), gives IBM an 18.9 percent stake in the new company. Lenovo will relocate its headquarters from Beijing to Armonk, New York.

In the short term, if you own an IBM computer, you probably won't notice too many changes. The deal calls for IBM to continue developing, selling, servicing, and supporting its PCs, at least for now; the company also has already committed to an 18-month plan to introduce new features to its ThinkPad line.

The new company will also continue to support its Aptiva desktop line and other older systems under the original terms of service. Current product names and logos will appear on IBM's systems for at least five years; the Lenovo brand name and logo will be phased in gradually.

But of course, it takes more than a name and a logo to earn--and keep--customers. IBM has a strong reputation for service and support, and ThinkPad users tend to be loyalists who rate support highly (click here for PC World's Reliability and Service report).

On the support front, IBM insists that the sale will be virtually invisible to current customers. "Absolutely, unequivocally, nothing will change," promises Bill Owens, who currently serves as vice president of service and support for IBM's Personal Computing Division, and who will continue in the same capacity for Lenovo. "[Lenovo] will run under the same management, employees, and contractors as before the deal."

That means that the terms on your PC's warranty won't change. Owens notes that customers who contact tech support will call the same toll-free number (800/426-7378) and talk to the same reps in Atlanta as they did before the sale. That arrangement won't change for at least five years, he adds. And some customers may be relieved to hear that Lenovo has no plans to employ techies overseas for U.S. callers. (IBM's URL for support will also remain the same: www.pc.ibm.com/support.)

Many experts predict that the Lenovo deal will add up to higher-quality products--and better deals to boot. Leslie Fiering, research vice president at industry research firm Gartner, says that the sale is simply good business. "It lets [the new company] keep operating expenses way down," she says. "Lenovo has a lot of innovative technologies to offer, and the efficiencies that will happen after the merger mean that the company won't have to slash quality or service." And that should result in better products and lower prices for buyers, Fiering believes.

Made in China--and More

Some analysts see the deal as a sign of things to come, especially as the U.S. tech market tightens and China's economy grows. Former IBM engineer and Wharton Business School management professor Mark Zbaracki puts it bluntly: "This sale is symbolic of something going away: the PC business in the U.S."

Assuming that the IBM/Lenovo deal works out well for IBM and its customers, should we expect that China's increasing role in the tech marketplace is good news for U.S. consumers? Not necessarily, although it could initially bode well for bargain hunters: Analysts predict that as technology becomes more of a global commodity, prices will drop as computer companies streamline their operating expenses and duke it out to win customers in a dwindling domestic market.

The bad news? The shift could eventually take a toll on the quality of products and service. "It's a double-edged sword," admits Fiering. "As the U.S. PC market gets squeezed, vendor price wars could force companies to cut back in areas [such as product innovation, service, and support] that will come back and hit them later."

If you're pondering another tech purchase, how can you be sure you're buying from a company that will still have a stateside address when you call a year or two down the road? Of course, there are never any guarantees that the company you buy from won't pull up stakes and head overseas, but you can take steps to make sure you don't get left behind.

It's old advice, but it bears repeating: Learn as much as you can about the tech company you're planning to buy from. Do a little research on the company's financial health (sites like www.hoovers.com offer financial reports for a fee), and check out tech support first-hand before you make your purchase by contacting the company directly. And it wouldn't hurt to brush up on your Chinese.