Posted 4/17/2006 09:20 (#5868) Subject: IBM's brand is worth something
I'm sure everyone has seen IBM's "ThinkPad" series of laptops in the past. Wife here has one and we've really liked it for years.
Since Lenovo, the Chinese computer manufacture, has taken over IBM's laptop line of PC's, sales of laptops that used to carry the "IBM" brand have been declining and the product is losing consumer loyalty to Dell and HP. Why?
Well, it appears that the Chinese are suffering from what I'll call a "Wal-Mart Effect." The actual manufacturing of the laptops has not changed, merely the ownership and branding have. Lenovo used to make the ThinkPads for IBM, with IBM maybe working on software and integration issues, as well as putting on the branding and front-line support -- so a ThinkPad you buy today is basically the same as the ThinkPad you used to buy with the IBM brand on it. The only thing that has changed is that that consumer awareness of the Chinese role in making the ThinkPad has become high.
And as a result of this consumer awareness, sales are falling off.
Seems that Americans have a perception of Chinese manufacturing as cheap, shoddy and not worth the premium prices IBM used to charge for the ThinkPad line, and Americans are buying laptops with American names on them -- like Dell and HP, which are also manufactured off-shore as well.
The Chinese might be able to make some quality products, but it will take them a generation to overcome the preception Americans have of their quality that has arisen from the Walmart shopping experience.