IBM outsources NetVista desktop PC manufacturing

IBM outsources NetVista desktop PC manufacturing

IBM Corp., prominent in the growth of personal computers over the last few decades, plans to outsource the manufacturing of its desktop PC line.

IBM this week announced that it has inked a deal with Sanmina-SCI Corp. of San Jose, Calif., to manufacture its NetVista desktop PC lines. Under the three-year, $5 billion deal, IBM will continue to develop NetVista computers and provide services and support to its PC customers, said Fran O'Sullivan, general manager of the personal computing division.

Outsourcing the PC manufacturing will reduce IBM's costs and let the company concentrate on research, design, marketing and product support, O'Sullivan said.

IBM has three NetVista product lines: the M series, with Intel Pentium 4 processors and the IBM Embedded Security Subsystem; the A series, with a choice of Intel Celeron or Pentium processors; and the small-footprint X series, with integrated flat-panel monitors.

IBM will continue to assemble its ThinkPad notebook PCs for the U.S. market at its plant in Guadalajara, Mexico, O'Sullivan said.

In a related move, IBM is licensing its NetVista line of thin-client desktop systems to another thin-client manufacturer, Neoware Systems Inc. of King of Prussia, Pa. Neoware will continue to upgrade existing, installed IBM thin clients with Neoware software. IBM will discontinue manufacturing its own thin clients and refer future customers to Neoware.

A few years ago, thin-client technology was projected to become a huge market, but it never materialized for IBM, O'Sullivan said. Also, the price difference between thin clients and standalone PCs turned out to be less than analysts predicted.

Agencies and health care providers are attracted to thin-client computing because the architecture reduces operating expenses and increases security, said Neoware president and chief executive officer Michael Kantrowitz. In a thin-client installation, enterprise data is stored on a central server, and the clients lack disk drives.

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