NEW YORK (AP) — IBM, whose name has been synonymous with personal computers for two decades, reports it will pull its money-losing line of PCs from U.S. stores and sell them exclusively over the Internet. Aptiva PCs will disappear from shelves starting Jan. 1. IBM’s ThinkPad laptops, which are profitable, will continue to be available in stores.
IBM’s Personal Systems Group, which sells PCs to both consumers and businesses, lost about $150 million in the second quarter and nearly $1 billion last year.
By withdrawing its PCs from the shelves of 70 U.S. retail chains, IBM will save money on the fees stores typically charge to display and promote products.
“We need to restore this business to profitability,” IBM spokeswoman Trink Guarino said. Moving out of stores “will save us a lot of money.”
To buoy awareness of the Aptiva brand and encourage people to visit its ShopIBM Web site, which it is redesigning, IBM plans to launch a $20 million advertising campaign early next year that will include television and direct mail.
IBM, the nation’s third-largest PC maker, is the latest technology company to
be squeezed by price wars and a surge in component costs.
Dell Computer Corp. warned that its third-quarter profits will be hurt by rising chip prices stemming from the Taiwan earthquake last month.
IBM’s cost-cutting comes two weeks after the company said it would cut up to 10 percent of the 10,000-member staff in its PC business as it consolidates several brands under one marketing umbrellas.
IBM pioneered the home computer in the early 1980s when it started selling an
affordable box-like device that sat on people’s desks. Even though IBM was quickly overtaken by sellers of cheaper PCs, such as Compaq Computer Corp., many home computers have long been known as “IBM clones.”
To differentiate its products, IBM introduced the Aptiva in 1994. But some analysts have suggested IBM simply stop selling personal computers.
