IBM, Armonk, NY, said this week that it will pursue a direct-only sales strategy after the first of the year for its Aptiva desktop personal computers. The company will continue to offer its Thinkpad laptops in certain outlets and will continue to sell its business PCs through third-party vendors.
IBM’s PC division reportedly lost $1 billion in 1998 and nearly a quarter of a billion dollars through the first half of this year. The direct-only policy followed an announcement two weeks ago that the company would merge its consumer and business PC divisions into one unit as part of a cost-cutting and reorganization strategy.
Trink Guarino, IBM’s director of public relations for the personal systems group, said the company had previously duplicated marketing efforts by brand but realized the need to streamline operations and take a new approach to the consumer market in general.
Steven Baker, a hardware analyst with PC Data Inc., Reston, VA, said the issue boils down to money and competition.
“IBM decided to pull its Aptiva from all indirect outlets for simple reasons of profit,” he said. “They say they are not making money selling it through retail channels [and] they want to reduce costs.”
But Baker noted that such a move does not necessarily spell increased sales or even profitability. He warned that all computer manufacturers face challenges that go beyond their sales channels, such as rising costs for computer memory.