C M Y ID NAME: Nxxx,2004-12-03,A,001,Bs-BK,E3 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

C M Y C M Y YELO MAG CYAN 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-03,A,001,Bs-BK,E3ID NAME: Nxxx,2004-12-03,A,001,Bs-BK,E3 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

NEW YORK, FRIDAY, DECEMBER 3, 2004

I.B.M. SAID TO PUT ITS PC BUSINESS ON THE MARKET

END OF ERA IN COMPUTING

Company Seeks to Stress Corporate Servers and Computer Services

By ANDREW ROSS SORKIN and STEVE LOHR International Business Machines, whose first I.B.M. PC in 1981 moved personal computing out of the hobby shop and into the corporate and con- sumer mainstream, has put the busi- ness up for sale, people close to the negotiations said yesterday. While I.B.M. long ago ceded the lead in the personal computer mar- ket to Dell and Hewlett-Packard so it could focus instead on the more lu- crative corporate server and com- puter services business, a sale would nonetheless bring the end of an era in an industry that it helped invent. The sale, likely to be in the $1 billion to $2 billion range, is expected to include the entire range of desktop, laptop and notebook computers made by I.B.M. The retreat from the business may be the ultimate acknowledgement that the personal computer has be- buyer for the unit. Lenovo was for- come a staple of everyday life, a merly known as Legend. commodity product, yielding very A spokesman for I.B.M., Edward slim profits. The companies that Barbini, said last night, “I.B.M. has a make the most money from PC’s policy of not confirming or denying these days are Microsoft and Intel — rumors.” whose software and chips are the If I.B.M.’s personal computer busi- standard for most of the personal ness ends up being sold to Lenovo, it computers sold, regardless of the would continue the migration of high- maker. technology manufacturing to China According to the people close to and Taiwan. the negotiations, I.B.M. is in serious In the 23 years since I.B.M. lent its discussions with Lenovo, China’s prowess in mainframe computers to largest maker of personal comput- ers, and at least one other potential Continued on Page C2

FOR HOME DELIVERY CALL 1-800-NYTIMES

0 3 5 4 6 1 3 9 4 9 5 0 4

FOR HOME DELIVERY CALL 1-800-NYTIMES FOR HOME DELIVERY CALL 1-800-NYTIMES

0 3 5 4 6 1 3 9 4 9 5 0 4 0 3 5 4 6 1 3 9 4 9 5 0 4 ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2 3 7 15 25 50 75 85 93 97

I.B.M. Said to Put Computer Unit on the Market in 2002. He has sold hardware busi- Continued From Page A1 to get out of that business as it made nesses where profits were slender only a modest profit or lost money. and growth prospects were limited, PC Shipments the production of desktop machines, For this year, analysts have expect- like its hard disk drive business, Includes desktops, it has been widely criticized for hav- ed a pretax profit of less than $100 which was sold to Hitachi. notebooks and servers. ing destined the machines to com- million. Instead, Mr. Palmisano has bet on modity status by giving Microsoft I.B.M. executives long resisted expanding the company’s services UNITED 1,000’s and Intel the rights to those essential that course, arguing that personal business, automating a full array of STATES UNIT MARKET standards. And although Apple Com- computers were technology products operations — from product design to Q3, ’04 SALES SHARE puter holds less than 4 percent of the its corporate customers wanted. It sales-order processing — for corpo- personal computing market world- held on to the business on the theory rate customers. I.B.M. now casts it- Dell 5,023 32.8% wide, it has been able to command that it helped hold on to customers. self as a company that does not sim- H.P. 3,133 20.5 relatively high prices and richer But in the most recent quarter, ply sell technology3 7 15 but25 50 serves75 85 as 93 a 97 Gateway 800 5.2 ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2profits because it has controlled the consulting partner to help its cus- I.B.M. ranked a distant third in I.B.M. 797 5.2 software and hardware that goes worldwide PC sales, with 5.6 percent tomers use technology to increase 3 7 15 25 50 75 85 93 97 ID NAME:into its machines. Nxxx,2004-12-03,C,002,Bs-BW,E2of the market, according to Gartner, the efficiency and competitiveness of Toshiba 561 3.7 A sale of the personal computer the market research firm. Dell was their businesses. As part of that Apple 510 3.3 business would be a step away from the leader with 16.8 percent of the strategy, he bought Pricewater- Sony 295 1.9 I.B.M.’s traditional emphasis on the world market, and Hewlett-Packard, houseCoopers Consulting for $3.5 bil- size of its revenue as a measure of its which has absorbed Compaq Com- lion, in a deal that closed in October WORLDWIDE corporate power. The PC business puter, had 15 percent. 2002. Dell 8,050 18.0% represents about 12 percent of “Palmisano’s getting out of busi- A sale now, if it happens, would be H.P. 7,176 16.1 I.B.M. Said to Put ComputerI.B.M.’s annualUnit revenue ofon $92 billion. the consistent Market with the strategy pursued nesses that aren’t growth opportuni- For nearly a decade, though, some by Samuel J. Palmisano, who be- ties and concentrating on what I.B.M. 2,696 6.0 I.B.M. Said toindustryin 2002. Put Heanalysts has soldComputer have hardware urged I.B.M. busi- came I.B.M.’s Unit chief executive on early theI.B.M. Market does best,’’ said Mark Stahl- Fujitsu 1,735 3.9 Continued From Page A1 to get out of that business as it made nesses where profits were slender man, an analyst at Carris & Compa- Acer 1,620 3.6 ny. “PC’s are not where the growth only a modest profit or lost money. and growth prospects were limited, in 2002.PC HeShipments has sold hardware busi- Toshiba 1,619 3.6 is.” the production of desktop machines, For thisContinued year, analysts From Page have A1 expect- liketo get its out hard of that disk business drive as business, it made nesses where profits were slender Includes desktops, To trim costs, I.B.M. has steadily NEC 1,221 2.7 it has been widely criticized for hav- ed a pretax profit of less than $100 whichonly a was modest sold to profit Hitachi. or lost money. and growth prospects were limited, PC Shipments notebooks3 7 and15 servers.25 50 75 85 93 97retreated from the manufacture of ing destined the machines to com- million.the production of desktop machines, ForInstead, this year, Mr. analystsPalmisano have has expect- bet on like its hard disk drive business, ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2 its PC’s.Includes In January desktops, 2002, it sold its Source: IDC WW Quarterly PC Tracker modity status by giving Microsoft it hasI.B.M. been executives widely criticized long resistedfor hav- expandinged a pretax the profit company’s of less than services $100 which was sold to Hitachi. UNITED 1,000’s desktopnotebooks PC manufacturing and servers. opera- and Intel the rights to those essential thating destined course, arguingthe machines that personal to com- business,million. automating3 7 15 25 a 50full75 array85 93of 97 Instead,STATES Mr. Palmisano has bet on UNIT MARKET tions in the Untied States and Europe ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2standards. And although Apple Com- computersmodity status were by technology giving Microsoft products operationsI.B.M. executives — from product long design resisted to expandingQ3, ’04 the company’sSALES SHARE services to Sanmina-SCI,UNITED based1,000’s in San Jose, puter holds less than 4 percent of the itsand corporateIntel the rights customers to those wanted. essential It sales-orderthat course, processing arguing that — for personal corpo- business, automating a full array of Hewlett-Packard, a broad-based Calif.STATES I.B.M. now confinesUNIT MARKETits role in personal computing market world- heldstandards. on to the And business although on Apple the theory Com- ratecomputers customers. were technology I.B.M. now products casts it- operationsDell — from 5,023product 32.8 design% to Q3, ’04 technology company where PC’s are PC’s to design and SALESproduct SHAREdevelop- wide, it has been able to command thatputer it holdshelped less hold than on to4 percentcustomers. of the selfits corporateas a company customers that does wanted. not sim- It sales-orderH.P. processing 3,133 — for20.5 corpo- only part of a much larger business, I.B.M. ment out of its offices in Raleigh, relatively high prices and richer personalBut in computing the most recent market quarter, world- plyheld sellon to technology the business but on serves the theory as a rate customers. I.B.M. now casts it- Dell 5,023 32.8% might face pressures similar to An I.B.M. ad campaign that ended in 1987 — seen then as an effort to Gateway 800 5.2 N.C., with all the I.B.M.-brand desk- profits because it has controlled the I.B.M.wide, it ranked has been a able distant to command third in consultingthat it helped partner hold on toto customers. help its cus- self as a company that does not sim- H.P. 3,133 20.5 I.B.M.’s. I.B.M. 797 5.2 top or notebook3 7 computers15 25 50 75made85 by93 97 soften the company’s image — featured a Charlie Chaplin look-alike. software and hardware that goes worldwiderelatively PC high sales, prices with and5.6 percent richer tomersBut in use the technology most recent to increase quarter, ply sell technology but serves as a “The PC divisions of H. P. and ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E23 7 15 25 50 75 85 93 97 contractGateway manufacturers3 7 15 25 80050 around755.285 the93 97 I.B.M. Said tointo itsPut machines. Computerofprofits the market, because Unit according it has controlled onto Gartner, thethetheI.B.M. efficiency Market ranked and a competitiveness distant third of in consultingToshiba partner to561 help 3.7 its cus- I.B.M.” Ms. Fiering wrote, “are vul- ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2 ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2 world.I.B.M. 797 5.2 A sale of the personal computer thesoftware market and research hardware firm. that Dell goes was theirworldwide businesses. PC sales, As with part 5.6 percent of that tomersApple use technology 510 to 3.3 increase nerable to being spun off if their drag Asia has increasingly become a prominent rival in chip making, has Leslie Fiering, a research vice major hub for technology manufac- a leading-edge plant in Germany. business would be a step away from theintoin 2002. leaderits machines. He with has sold 16.8 hardware percent of busi- the strategy,of the market, he according bought Pricewater-to Gartner, the efficiencySony and competitiveness 295 1.9 of Toshiba 561 3.7 on margins and profitability are I.B.M. Said to PutContinued FromComputer Page A1 Unit on thenesses Market where profits were slender president at Gartner, has predicted turing. More and more chip making Personal computer making has I.B.M.’sto get out traditional of that business emphasis as it on made the worldA sale market, of the and personal Hewlett-Packard, computer houseCoopersthe market research Consulting firm. for Dell $3.5 wasbil- their businesses. As part of that Apple 510 3.3 deemed too great by their parent consolidation in the PC industry over sizeonly of a its modest revenue profit as a ormeasure lost money. of its whichbusinessand growth has would absorbed prospects be a step Compaq were away limited, Com-from lion,the PC leaderin a dealShipments with that 16.8 closed percent in October of the strategy,WORLDWIDE he bought Pricewater- companies.” is done in the contract factories, like followed the same path to Asia, espe- in 2002. He has sold hardware busi- the nextSony few years. 295 1.9 Taiwan Semiconductor, and at new cially in the case of notebook ma- Continued From Page A1 the production of desktop machines, corporateFor this year, power. analysts The PChave business expect- puter,I.B.M.’slike its had traditional hard 15 percent. disk emphasis drive business, on the 2002.worldIncludes market, desktops, and Hewlett-Packard, houseCoopersDell Consulting 8,050 for18.0 $3.5% bil- In the meantime, she said, Asian to get out of that business as it made nesses where profits were slender “ExitingWORLDWIDE the market may be the chines made in China and Taiwan. it has been widely criticized for hav- representsed a pretax aboutprofit of 12 less percent than $100 of sizewhichA ofsale wasits now, revenue sold if to it Hitachi.ashappens, a measure would of itsbe which“Palmisano’snotebooks has absorbed and getting servers. Compaq out of Com- busi- lion, in a deal that closed in October vendors like Lenovo “appear well po- foundries in China. only a modest profit or lost money. and growth prospects were limited, PC Shipments H.P. 7,176 16.1 only logical choice for global vendors ing destined the machines to com- I.B.M.’smillion. annual revenue of $92 billion. consistentcorporateInstead, withMr. power. Palmisanothe Thestrategy PC has businesspursued bet on nessesputer, had that 15 aren’t percent. growth opportuni- 2002. Dell 8,050 18.0% sitioned to leverage their strong lo- Still, in the semiconductor indus- Lenovo has had long ties with I.B.M. the production of desktop machines, For this year, analysts have expect- like its hard disk drive business, I.B.M. Mike 2,696Mergen/Bloomberg6.0 News bleeding profits and struggling for try, Intel and I.B.M. still have big fac- It got its start in 1984 as a distributor modity status by giving Microsoft ForI.B.M. nearly executives a decade, longthough, resisted some byrepresentsexpanding Includes Samuel the J. aboutdesktops, Palmisano, company’s 12 percent whoservices be- of tiesA UNITEDsale and now, concentrating if it happens,1,000’s onwould what be “Palmisano’s getting out of busi- cal-market standing and low-cost op- it has been widely criticized for hav- ed a pretax profit of less than $100 which was sold to Hitachi. A sale of the unit, should it materialize, is expected to include the entire share,”H.P. she wrote 7,176 in a recent16.1 re- tories in the United States, and Ad- of personal computers from I.B.M. and Intel the rights to those essential industryI.B.M.that course, analysts arguing have Said that urged personal I.B.M. tocameI.B.M.’sbusiness, notebooksPut I.B.M.’s annual automating and chiefrevenue Computer servers. executive a offull $92 array billion. early of I.B.M.consistentSTATES does Unit with best,’’ the saidstrategyUNIT MarkonMARKET pursued Stahl- thenessesFujitsu Market that aren’t growth1,735 opportuni-3.9 erating models into a global pres- ing destined the machines to com- million. Instead, Mr. Palmisano has bet on range of desktop, laptop and notebook computers made by I.B.M. searchI.B.M. report. And2,696 she noted6.0 that vanced Micro Devices, Intel’s most and AST, the Taiwan PC maker. I.B.M. Said tostandards. Put And althoughComputer Apple Com- I.B.M.computers Unit were technology Said on products the tooperationsFor Put Marketnearly — afrom decade,Computer product though, design some to man,by SamuelQ3, an ’04 analystUnit J. Palmisano, at SALESCarris on & SHARE whoCompa- be-theties Acer andMarket concentrating 1,620 on3.6 what ence.” modity status by giving Microsoft expanding the company’s services puterI.B.M. holds executives less than 4 longpercent resisted of the its corporate customers wanted. It industrysales-orderUNITED analysts processing have1,000’s —urged for corpo-I.B.M. ny.camein 2002. “PC’s I.B.M.’s He are has not chief sold where executive hardware the growth early busi- I.B.M. does best,’’ said Mark Stahl- Fujitsu 1,735 3.9 and Intel the rights to those essential that course, arguing that personal business,Continued automating From a Page full arrayA1 of Dell 5,023 32.8% Toshiba 1,619 3.6 personal computing market world- heldin 2002. on to He the has business sold hardware on the theory busi- torate getSTATES customers. out of that I.B.M.businessUNIT now MARKETas castsit made it- inis.”nesses 2002. where He has profits sold hardware were slender busi- man, an analyst at Carris & Compa- Acer 1,620 3.6 standards. And although Apple Com- computers were technology products operationsContinued — from From product Page designA1 to Q3, ’04 NEC 1,221 2.7 Continued From Page A1 wide,to get itout has of that been business able to as command it made thatnesses it helped where hold profits on to werecustomers. slender toonlyself get asa out a modest company of that profit business thatSALES or does lost asSHARE notit money. made sim- nessesandTo H.P. growth trim where costs, prospects profits I.B.M. 3,133 were were has 20.5 steadily slenderlimited, ny. “PC’sPC Shipments are not where the growth puter holds less than 4 percent of the itsrelatively corporate high customers prices and wanted. richer It sales-orderthe production processing of desktop — formachines, corpo- ply sell technology but serves as a retreatedlike its hard from disk the manufacture drive business, of Toshiba 1,619 3.6 only a modest profit or lost money. andBut growth in the prospects most recent were quarter, limited, onlyFor DellPCthis a modest year,Shipments analysts profit 5,023 or have lost32.8 money.expect-% and Gateway growth prospects 800 were 5.2 limited, is.” PCIncludes Shipments desktops, personal computing market world- heldprofits on becauseto the business it has controlledon the theory the rateit has customers. been widely I.B.M. criticized now castsfor hav- it- consulting partner to help its cus- itswhich Judge PC’s. was In sold January to Hitachi.Narrows 2002, it sold its ScopeSource: IDC WW of Quarterly Suit PC Tracker NEC 1,221 2.7 the production of desktop machines, For this year, analysts have expect- theI.B.M.like production its ranked hard of disk a desktop distant drive machines, business, third in Fored aIncludesthis pretax year, profitdesktops, analysts of less have than expect- $100 like I.B.M. its hard disk drive797 business,5.2 ToIncludesnotebooks trim costs, desktops, and I.B.M. servers. has steadily Music Industry Turns to Creator of Napster for Assistance wide, it has been able to command thatsoftware it helped and hold hardware on to customers. that goes selfing as destined a company the machinesthat does not to com-sim- tomersH.P. use technology 3,133 to20.5 increase desktopInstead, PC Mr. manufacturing Palmisano has opera-bet on it has been widely criticized for hav- ed a pretax profit of less than $100 itworldwidewhich has been was soldPCwidely sales, to Hitachi. criticized with 5.6 for percent hav- edmillion. a pretax profit of less than $100 which was sold to Hitachi. retreatednotebooks from and the servers. manufacture of relatively high prices and richer intoBut its inmachines. the most recent quarter, plymodity sell technologystatus by giving but serves Microsoft as a the efficiencynotebooks and and competitiveness servers. of expandingToshiba the company’s 561 3.7 services Source: IDC WW Quarterly PC Tracker ing destined the machines to com- million. ingof Instead,the destined market, Mr. the accordingPalmisano machines to has Gartner, to bet com- on million.I.B.M.Gateway executives 800 long 5.2 resisted tionsInstead,Over in the Mr. Untied Palmisano Boston States and has Europe bet onScientificits PC’s.UNITED In January Stents1,000’s 2002, it sold its able for copyright violations. “fingerprinting” technology not un- profits because it has controlled the I.B.M.A sale ranked of the a personal distant computer third in consultingandthe marketIntel the partner research rights to to firm.those help Dellessential its cus- was their businesses. As part of that tobusiness, Sanmina-SCI,Apple automating based 510 a infull San 3.3array Jose, of desktop PC manufacturing opera- Continued From First Business Page modity status by giving Microsoft I.B.M. executives long resisted modityexpanding status the by company’s giving Microsoft services thatI.B.M.I.B.M. UNITED course, executives arguing1,000’s 797 long that 5.2 personal resisted expanding the company’s services Hewlett-Packard,UNITEDSTATES 1,000’s aUNIT broad-basedMARKET The networks have long argued — like the sort that Snocap relies on — software and hardware that goes worldwidebusiness would PC sales, be a withstep 5.6away percent from tomersstandards.the leader use And with technology although 16.8 percent toApple increase of Com- the strategy, he bought Pricewater- Calif.operations I.B.M. — now from confines product its design role into tions in the Untied States and Europe and Intel the rights to those essential that course, arguing that personal andbusiness, Intel the automating rights to thosea full essential array of thatcomputers ToshibaSTATES course, were arguing technology 561UNIT that MARKET 3.7 personalproducts business,Sony automating 295a full array1.9 of withouttechnologySTATESQ3, ’04 a company trial. HeSALESUNIT where dismissedMARKET SHAREPC’s are A software program and a federal appeals court has a technique that tracks the sonic into its machines. ofI.B.M.’s the market, traditional according emphasis to Gartner, on the the efficiency and competitiveness of houseCoopers Consulting for $3.5 bil- sales-order processing — for corpo- standards. And although Apple Com- computers were technology products standards.puterworldoperations holdsmarket, And —less from andalthough than Hewlett-Packard,product 4 percent Apple design ofCom- the to computersits corporateQ3, ’04 were customers technologySALES wanted. productsSHARE It operationsPC’s toBy design BARNABY — from and productproduct J. FEDER design develop- to Medinol’sonlyto Sanmina-SCI,Q3, part ’04 of claim a much that basedSALES larger Boston in SanSHAREbusiness, Sci- Jose, wayHewlett-Packard, to attract paying a music broad-based fans. I.B.M. agreed — that they cannot monitor characteristics of music files. A sale of the personal computer thesize marketof its revenue research as a firm. measure Dell of was its their businesses. As part of that lion,Apple in a deal that closed 510 in3.3 October WORLDWIDE Dell 5,023 32.8% puter holds less than 4 percent of the its corporate customers wanted. It puterpersonalwhichsales-order holds has computing less absorbed processing than 4 market Compaqpercent — for world- corpo-of Com- the itsheld corporate on to the customersbusiness on wanted.the theory It sales-ordermentrate customers. out of processing its I.B.M. offices — now in for Raleigh, casts corpo- it- entificmightCalif. I.B.M. stole face itsnow pressures design confines and similar its trade role toin technology“If what they’recompany looking where for PC’s is free, are that can help detect their users. But the music companies But a judge’s ruling forced the net- business would be a step away from thecorporate leader power. with 16.8 The percent PC business of the strategy, he bought Pricewater- 2002. self as a company that does not sim- Dell 5,023 32.8% An I.B.M. ad campaign that ended in 1987 — seen then as an effort to personal computing market world- held on to the business on the theory personalwide,puter,rate customers. ithad has computing 15 beenpercent. I.B.M. able market nowto command casts world- it- heldthatSony Delliton helped to the holdbusiness on 5,023 295to oncustomers. the32.81.9 theory% rateN.C., Dell customers. with all the I.B.M. I.B.M.-brand 8,050 now 18.0 casts % desk- it- I.B.M.’s.PC’sH.P. to design and 3,133product 20.5 develop- thenonly part they’re of a notmuch likely larger to business, partici- may argue that Snocap proves thatI.B.M. it work out of service in mid-2001. Mr. I.B.M.’s traditional emphasis on the world market, and Hewlett-Packard, houseCoopers Consulting for $3.5 bil- Time is running out for Boston secrets to create the Express soften the company’s image — featured a Charlie Chaplin look-alike. wide, it has been able to command representsthat it helped abouthold on 12to customers. percent of wide,relativelyselfA assale it a has now,company high been if it prices ablehappens,that todoes and command would not richer sim- be thatBut“Palmisano’s itH.P. helped in the hold most getting on 3,133 to recent customers. out 20.5 quarter, of busi- selftopply oras sell notebooka technologycompany computers that but does serves madenot sim- as by a ment“TheH.P.Gateway out PC of divisions its offices 3,133 800 of in H.20.5 5.2 Raleigh, P. and pate,”might said face Josh pressures Bernoff, similar an analyst to pirated music files. is possible to track and block the Fanning became a consultant for size of its revenue as a measure of its which has absorbed Compaq Com- lion, in a deal that closed in October WORLDWIDE ScientificH.P. to resolve 7,176 voluntarily16.1 stent line, which3 7 later15 25 became50 75 the85 93 97 An I.B.M. ad campaign that ended in 1987 — seen then as an effort to relatively high prices and richer I.B.M.’sBut in annual the most revenue recent of $92 quarter, billion. relativelyprofitsconsistentply sell because technology with high theit prices has strategy but controlled servesand pursued richer as the a I.B.M.nessesBut inthat ranked the aren’t most a growth distant recent opportuni- thirdquarter, in plycontractconsulting sell technology manufacturers partner but to help serves around its as cus- the a I.B.M.”N.C., with Ms. all Fiering the I.B.M.-brand wrote, “are desk- vul- withI.B.M.’s. Forrester Research. “There’s transmission of unauthorized con- Roxio, which bought Napster’s fa- corporate power. The PC business ID NAME:2002. Nxxx,2004-12-03,C,002,Bs-BW,E2Gateway 800 5.2 whatI.B.M. could be a2,696 multibillion-dol-6.0 basisGatewayI.B.M. for Taxus. 800797 5.25.2 soften the company’s image — featured a Charlie Chaplin look-alike. profits because it has controlled the puter,For hadnearly 15 percent. a decade, though, some profitssoftwarebyconsulting Samuel because and partner J. hardware Palmisano,it has to controlled help that who its goes cus-the be- worldwideties Dell and PC concentrating sales, 8,050 with 5.618.0 on percent % what consultingworld.tomers use partner technology to help to increase its cus- nerabletop or notebook to being spuncomputers off if their made drag by goingAsia to has have increasingly to be some become sort of a prominent rival in chip making, has tent. mous name at a bankruptcy auction represents about 12 percent of I.B.M. ranked a distant third in “Palmisano’s getting out of busi- I.B.M.I.B.M. ranked a distant797 third5.2 in ButI.B.M. he said that Medinol797 5.2 could “The PC divisions of H. P. and software and hardware that goes industryA sale now,analysts if it happens,have urged would I.B.M. be softwareintocametomers its I.B.M.’s machines. use and technology hardwarechief executive to that increase early goes ofI.B.M. theH.P. market, does best,’’ according 7,176 said Mark to16.1 Gartner, Stahl- tomerstheLeslielar efficiencyFujitsu liability use Fiering, technology and resulting competitiveness a1,735 research to from increase3.9 vice the of contractToshiba manufacturers 561 around3.7 the uniquenessmajor hub to for a technologysystem like manufac- this that velopment,a leading-edge Mashboxx, plant in Germany. has been in “I just view this as an exercise in and transformed it into a subscrip- I.B.M.’s annual revenue of $92 billion. worldwide PC sales, with 5.6 percent nesses that aren’t growth opportuni- worldwide PC sales, with 5.6 percent tryon to margins prove at and a trial profitability that Boston are I.B.M.” Ms. Fiering wrote, “are vul- into its machines. consistent with the strategy pursued intotheA efficiency its sale machines. of the and personal competitiveness computer of theman, marketToshiba an analyst research at Carris 561 firm. & Dell3.7 Compa- was thepresidenttheir breakdownefficiencyAcer businesses. at Gartner,and of its competitiveness As1,620relationship has part predicted 3.6 of with that of world.ToshibaApple 561510 3.73.3 goesturing. beyond More itand being more a chip peer-to-peer making PersonalAsia has computerincreasingly making become has a R.I.A.A.prominent propaganda,” rival in chip said making, Fred Vonhas tion music service. For nearly a decade, though, some of the market, according to Gartner, ties and concentrating on what of theI.B.M. market, according2,696 to 6.0Gartner, deemed too great by their parent nerable to being spun off if their drag discussions to plug Snocap’s soft- A sale of the personal computer by Samuel J. Palmisano, who be- businesstheirA sale businesses. would of the be personal a As step part away computer of from that theny. “PC’s leaderApple are with not 16.8 where 510 percent the3.3 growth of the theirconsolidationstrategy,Medinol businesses. , he the in boughtthe Israeli As PC partindustry companyPricewater- of over that it ScientificLeslieApple Fiering,violated contractual a 510 research 3.3 ob- vice system.”is done in the contract factories, like followedmajor hub the for same technology path to Asia, manufac- espe- Lohmann,a leading-edge a lawyer plant atin theGermany. Electronic When Mr. Fanning began making industry analysts have urged I.B.M. the market research firm. Dell was I.B.M. does best,’’ said Mark Stahl- the marketFujitsu research 1,735 firm. Dell3.9 was Toshiba 1,619 3.6 companies.”Sony 295 1.9 on margins and profitability are ware into its system, according to business would be a step away from came I.B.M.’s chief executive early businessI.B.M.’sstrategy, traditionalwould he be bought a emphasisstep Pricewater-away on from the worldis.” market, and Hewlett-Packard, strategy,thehouseCoopersworked next few withhe years. Consulting boughtin 1995 to Pricewater- getfor into$3.5 thebil- ligationspresident to at work Gartner, with it has on predictedfuture TaiwanThe existing Semiconductor, networks and have at new at- ciallyturing. inMore the and case more of notebook chip making ma- FrontierPersonal Foundation, computer referring making to hasthe the rounds of the major labels to talk the leader with 16.8 percent of the man, an analyst at Carris & Compa- the leaderSony with 16.8 295 percent 1.9 of the NEC 1,221 2.7 InSony the meantime, 295 she said,1.9 Asian deemed too great by their parent people in the music industry involved I.B.M.’s traditional emphasis on the I.B.M.’ssizehouseCoopers of its traditional revenue Consulting as emphasis a measure for $3.5 on of thebil- its whichToAcer trim has costs, absorbed I.B.M. 1,620 Compaq has 3.6 steadily Com- houseCooperslion,“Exitingstent in a business. deal the Consultingthat market closed may for in October$3.5 be bil- the productsconsolidationWORLDWIDE in ways in the that PC would industry allow over tractedfoundries millions in China. of fans hungry for chinesis done madein the contract in China factories, and Taiwan. like Recordingfollowed the Industry same path Association to Asia, espe- of up his newest creation in the middle world market, and Hewlett-Packard, ny. “PC’s are not where the growth world market, and Hewlett-Packard, vendors like Lenovo “appear well po- companies.” in the talks. size of its revenue as a measure of its which has absorbed Compaq Com- sizecorporatelion, of in its a revenuedeal power. that as Theclosed a measure PC in businessOctober of its whichputer,retreatedToshibaWORLDWIDE had has 15 from absorbed percent. the 1,619 manufacture Compaq 3.6 Com- of lion,only2002. inlogicalJudge a deal choice Alvin that forclosed K. global Hellerstein in Octobervendors of Medinolsitionedthe nextWORLDWIDEDell tofew to claim leverage years. royalties 8,050 their on18.0 strong Bos-% lo- freeStill,In musicthe in meantime, the and semiconductor movies, she said, and indus- Asian their LenovoTaiwanBut even has Semiconductor, had if licensedlong ties andfile-sharingwith atI.B.M. new America.cially in the Mr. case Von ofLohmann notebook repre- ma- of last year, he was greeted with is.” Mike Mergen/Bloomberg News Source: IDC WW Quarterly PC Tracker corporate power. The PC business corporaterepresents2002. power. about The 12 PC percent business of itsA PC’s. sale now, In January if it happens, 2002, itwould sold itsbe 2002.bleeding“Palmisano’sFederal profits District getting and Court struggling out in Manhat- of busi- for ton“Exiting Scientific’s the market stents mayor other be the parenttry, Intel companies and I.B.M. still have have generated big fac- Itfoundries got its start in China. in 1984 as a distributor sentschines StreamCast made in China Networks, and Taiwan. the skepticism in some quarters. But puter, had 15 percent. To trim costs, I.B.M. has steadily puter,NECDell had 15 percent. 1,2218,050 18.02.7 % cal-marketDellH.P. standing 8,0507,176 and low-cost 18.016.1% op- vendors like Lenovo “appear well po- fails commercially, music execu- represents about 12 percent of A sale now, if it happens, would be representsAI.B.M.’s “Palmisano’ssale of annual the about unit, revenue getting should 12 of percent out $92 it ofmaterialize, billion. busi- of consistentdesktopA is sale expected now, PC with manufacturingif totheit includehappens, strategy the would pursued entire opera- be share,”nesses“Palmisano’stan issuedthat she aren’t wrote an getting 84-page growth in a out ruling recentopportuni- of busi- yes- re- monetaryeratingonly logical models damages. choice into for aglobal global vendors pres- revenuetoriessitioned in by to the leverageshowering United States,their users strong with and Ad-ad- lo- tivesof Still, personal are in privately the computers semiconductor delighting from I.B.M.inindus- the companyLenovo has that had long releases ties with Morpheus I.B.M. several executives said the lasting retreatedFor nearly from a decade, the manufacture though, some of tionsH.P. in the Untied States 7,176 and16.1 Europe searchties and report. concentrating Mike And Mergen/Bloomberg she noted on what thatNews H.P.I.B.M. 7,1762,696 16.16.0 I.B.M.’s annual revenue of $92 billion. I.B.M.consistent with the strategySaid pursued toI.B.M.’srangenesses Put of that annual desktop, aren’t revenue Computer laptopgrowth of $92andopportuni- billion. notebook consistentby computers SamuelSource: Unit IDCwith J. WWmade the Palmisano, Quarterly strategy by I.B.M. PCon Tracker pursued who be-thenessesterday Market that that aren’t narrowed growth the opportuni- scope of ence.”bleedingHe also profits ruled that and a struggling manufac- for vertisements.vancedcal-market Micro standing Devices, Snocap and Intel’slow-cost executives, most op- public-relationsandtry, IntelAST, andthe TaiwanI.B.M. value still PC havemaker. of working big fac- software.It got its start “If youin 1984 care as a about distributor copy- power of Mr. Fanning’s original file- its PC’s. In January 2002, it sold its For nearly a decade, though, some industrytiesFor andnearly analysts concentrating a decade, have though, urged on I.B.M.some what Acameto sale Sanmina-SCI,I.B.M. I.B.M.’s of the unit, chief based 2,696should executive in Sanit6.0 materialize, early Jose, tiesI.B.M.Hewlett-Packard, is expected and does concentrating best,’’ to include said a broad-basedMark the on entire Stahl- what turingshare,”I.B.M.Fujitsu line she that wrote Boston 2,696 1,735 in a Scientific recent6.03.9 re- who declined to comment for this ar- tories in the United States, and Ad- right,”of personal he added, computers “why from would I.B.M. you sharing concepts intrigued them by Samuel J. Palmisano, who be- desktop PC manufacturing opera- by Samuel J. Palmisano, who be- the dispute and he scheduled a erating models into a global pres- with their onetime legal nemesis. industry analysts have urged I.B.M. industryI.B.M. does analysts best,’’ have said urged Mark I.B.M. Stahl- inrangeCalif. 2002.Fujitsu I.B.M.of He desktop, hasnow sold confines laptop1,735 hardware and its3.9 role notebook busi- in I.B.M.man,technology computers an does analyst company best,’’ made at said Carrisby where I.B.M. Mark & PC’s Compa- Stahl- are secretlysearchFujitsu report. built in And Ireland 1,735 she to noted 3.9 make that ticle, argue that the network opera- vanced Micro Devices, Intel’s most wantand AST, to drivethe Taiwan people PC to maker. more off- enough to listen to his latest idea. came I.B.M.’s chief executive early tions in the Untied States and Europe came I.B.M.’s chief executive early meeting in January to set the date Acer 1,620 3.6 ence.” “We sort of liked the irony of the Continued From Page A1 man, an analyst at Carris & Compa- nessesPC’s to wheredesign profitsand product were develop- slender man,ny.only “PC’s partan analyst of are a much not at whereCarris larger the& business, Compa- growth tors are, in the end, entrepreneursI.B.M. shore, encrypted, anonymous kinds “This is a world of very short toto get Sanmina-SCI, out of that business based in as San it made Jose, Acer 1,620 3.6 for a trial that he said should be- the Acer Medinol-designedToshiba 1,6201,619 stents 3.63.6 vio- whole thing,” said one executive, re- ny. “PC’s are not where the growth Hewlett-Packard,andment growth out of prospects its offices a were broad-based in Raleigh, limited, ny.is.”might “PC’s face are pressures not where the similar growth to who will be persuaded that changing calling an early meeting with Mr. of networks? That’s all this would ac- memories,” one music executive Calif.only aI.B.M. modest now profit confines or lost its money.role in Toshiba 1,619 3.6 ginPC promptly. Shipments latedAn ToshibaI.B.M.NEC the termsad campaign of 1,6191,221 their that agree-3.62.7 ended in 1987 — seen then as an effort to the production of desktop machines, is.”Judge Narrows technologylikeN.C.,Scope its with hard allcompany the diskof I.B.M.-brand drivewhereSuit business,PC’s desk- are is.”I.B.M.’s.To trim costs, I.B.M. has steadily to a Snocap-driven business is a wis- complish.” said. “If you held grudges you would- PC’sFor this to design year, analystsand product have develop- expect- MusicIncludesMedinol’s desktops, lawsuit, Industry filed in April ment,soften Turns leavingthe company’s it toto Medinol image Creator — to featured a Charlie of Chaplin Napster look-alike. forFanning, Assistance who declined to comment it has been widely criticized for hav- To trim costs, I.B.M. has steadily onlywhichtop or NECpart wasnotebook of sold a much to computers Hitachi. 1,221 larger business,made2.7 by retreatedTo“The trim PC fromcosts, divisions the I.B.M. manufacture of has H. steadily P. and of NEC 1,221 2.7 I.B.M. er path to profit. for this article. There is no dearth of examples of n’t last two minutes in this industry.” mented a pretax out of profit its offices of less in than Raleigh, $100 ofnotebooks 2001, is seeking and servers. royalties of up proveSource: damages IDC WW from Quarterly the PC action Tracker at ing destined the machines to com- retreated from the manufacture of mightcontractInstead,Judge face manufacturers Mr. pressures Palmisano Narrows similararound has bet theon to retreatedAnitsI.B.M.”Scope PC’s.I.B.M. Ms. In from ad JanuaryFiering campaign theof manufacture wrote, 2002,Suit that it “are sold ended vul- its of in 1987 — seen then as an effort to For the moment, however, there how technological shifts have left the Mr. Fanning “was popularly N.C.,million. with all the I.B.M.-brand desk- to 23 percent on every Express aMusic trial. Industryable Turns for copyright violations. to Creator“fingerprinting”Perhaps of more Napster important, technology the not roll- un- for Assistance its Over PC’s. In January Boston 2002, it sold Scientific its I.B.M.’s.world.Source: IDC WW QuarterlyStents PC Tracker itsdesktopContinued PC’s. InPC From January manufacturing First 2002, Business it sold opera- Page its AsiaSource: has IDC increasinglyWW Quarterly PC Tracker become a appearsprominent little rival chance in chip that making, the most has recording industry unsure of where thought of as a dragon slayer, when modity status by giving Microsoft I.B.M. executives long resisted expanding the company’s services softennerableUNITED the to beingcompany’s spun1,000’s off image if their — drag featuredBoston a Charlie Scientific Chaplin said look-alike. that its li- The networks have long argued — outlike ofthe Snocap sort that may Snocap figure relies in the on in- — top or notebook computers made by “TheLeslie PC Fiering, divisions a research of H. P. viceand tionsand in Taxus the Untied stent States Boston and Scientific Europe major hub for technology manufac- a leading-edge plant in Germany. and Intel the rights to those essential thatdesktop course, PC arguing manufacturing that personal opera- business, automating a full array of desktopon STATES margins PC manufacturing and profitabilityUNIT MARKET opera- are A software program popularand a federal file-sharing appeals networks, court like has dustry’saable technique for copyright bid to that reverse violations. tracks a the series sonic of to“fingerprinting” turn. In 1998, the technology major music not cor- un- in reality that wasn’t his intention” contract manufacturers around the I.B.M.”withoutpresidentOver Ms. a at Fieringtrial. Gartner, Boston He wrote, has dismissed predicted“are vul-Scientificto has Sanmina-SCI, sold. Taxus basedStents quickly in San became Jose, ability,turing. More if any, and would more be chip minimal making Personal computer making has standards. And although Apple Com- computerstions inBy the BARNABY wereUntied technology States J. FEDER and products Europe operations — from product design to tionswaydeemed Q3, toin attractthe’04 too Untied great paying States SALES by music their andSHARE fans. Europe parent Hewlett-Packard,Continued From First a Business broad-based Page Kazaa,agreed —will that embrace they cannot the software, monitor lossescharacteristicsThe innetworks court, of wherehave music long the files. argued major la-— porationslike the sort sued that (unsuccessfully) Snocap relies on —to with Napster, said Larry Kenswil, world. nerableMedinol’sconsolidation to being claim in thespun that PC off Boston industry if their Sci- drag over Asiathe market has increasingly leader once become it was a prominentbecause no rival stents in chip from making, that se- has puter holds less than 4 percent of the itsto Sanmina-SCI, corporate customers based in wanted. San Jose, It sales-orderHewlett-Packard, processing a — broad-based for corpo- toCalif.companies.” “If Sanmina-SCI, whatI.B.M. they’re now basedconfines looking in for Sanits isrole Jose,free, in Hewlett-Packard,thattechnologyis done canin the company contracthelp a wheredetect factories, broad-based PC’s likeare whichtheirAfollowed software users. means the But same the the industry pathprogram music to companies Asia,may espe-have belsandBut have a a judge’s federal been ruling seeking appeals forced verdicts court the net- has to blocka technique the release that of tracks Diamond the Multi- sonic president of Universal Music’s Leslie Fiering, a research vice onentificthe next margins stole few years. its and design profitability and trade are majorwithoutPC’scleared to hub design a for for trial. technologyand use Heproduct in dismissed the manufac- develop- United acret leading-edge line were plant ever in sold, Germany. a claim personal computing market world- heldCalif. on I.B.M. to the now business confines on theits theoryrole in ratetechnology customers.By BARNABY company I.B.M. where J. nowFEDER PC’s casts are it- Calif.thenInDell the they’reI.B.M. meantime, now not confines likely5,023 she said, toits32.8 partici-role Asian% in technologywayonlyTaiwan topart attract Semiconductor, of company a payingmuch largerwhere music and business,PC’sfans. at neware tomaycially rely argue in on the anthat case upstart Snocap of notebook networkproves that with ma- it holdworkagreed out the — of that companiesservice they in cannot mid-2001. behind monitor I.B.M.Mr. the media’scharacteristics portable of MP3 music player, files. saying eLabs division. “He’s taken that ex- presidentTime at is Gartner,running out has for predicted Boston deemedsecrets“Exiting totoo the create great market by the their may Express parent be the turing.Medinol’smentStates outMore this claimof and itsyear. that officesmore Stents Boston chip in are Raleigh,making Sci-metal MedinolfoundriesPersonal disputed. in China. computer making has chines made in China and Taiwan. wide, it has been able to command thatPC’s it to helped design hold and on product to customers. develop- selfonly as part a company of a much that larger does business, not sim- PC’spate,”vendorsH.P. to said design like Josh Lenovo and Bernoff, 3,133product “appear an20.5 develop- well analyst po- onlypiratedmight“If part what face of they’re a music pressuresmuch looking larger files. similarfor business, is free,I.B.M. to fewisthatAn possible I.B.M. customers. can ad to helpcampaign track One network anddetect that block inended thede- inGroksterFanningtheir 1987 users. — andbecame seen But Morpheus thethen amusic consultantas networksan companies effort I.B.M. for li-to it “promotesBut a judge’s the ruling illicit forceduse” of the digital net- perience, taken a step back and consolidation in the PC industry over companies.”stentonly logical line, which choice later for becameglobal vendors the isentificN.C., donemesh with stolein cylindersthe all its contract the design I.B.M.-brand that factories, and prop trade desk- open like followedJudge the Hellerstein same path also to Asia, refused espe- relatively high prices and richer mentButScientific out in the of to its most resolve offices recent involuntarily quarter,Raleigh, plymight sell face technology pressures but serves similar as to a mentwithsitioned Forrester out to of leverage its Research. offices their in strong “There’sRaleigh, lo- mightthenI.B.M.’s.Still, they’re face in the pressures not semiconductor likely similar to partici- indus- to transmissionLenovo has had of long unauthorized ties with I.B.M. con- Roxio,may argue which that bought Snocap Napster’sproves that fa- it musicwork out files. of service in mid-2001. Mr. thought of a way that everyone can the next few years.Mike Mergen/Bloomberg News basisbleedingIn theTimefor Taxus. meantime, profits is running and she out struggling said, for Asian for TaiwansecretstopAn orGatewayI.B.M. notebook Semiconductor, to ad create campaign computers the800 and Expressthat 5.2made at ended new by inciallyto 1987 dismiss in— the withoutseen case then trial of as notebook a an number effort ma- to Ansoften I.B.M. the company’sad campaign image that —ended featured in 1987 a Charlie — seen Chaplin then as look-alike. an effort to profits because it has controlled the I.B.M.N.C.,what with ranked could all the be a I.B.M.-brand a distant multibillion-dol- third desk- in consultingI.B.M.’s. partner to help itsBoston cus- N.C.,goingcal-marketblood with to vessels. have all standing the to I.B.M.-brand be and some low-cost sort desk- op- of I.B.M.’s.pate,”try,“The Intel said PC and Josh divisionsI.B.M. Bernoff, still of have anH. analystbig P. fac- and tent.piratedIt got its start music in 1984 as files. a distributor mousis possible name toat a track bankruptcy and block auction the FanningSix years became later, a the consultant industry for is benefit.” A sale of the unit, should it materialize,“Exiting is expected the to market include may the beentire the vendorsshare,”ButScientific he like she said Lenovo wroteto that resolve Medinol“appear in a voluntarily recent couldwell po- re- foundriesstentcontractsoftenI.B.M. line, the manufacturersin which company’s China. later797 became image around5.2 —the featuredthe chinesoftories Medinol’sa Charlie in made the Chaplin United in potential China States, look-alike. and defenses Taiwan. and Ad- softenof personal the company’s computers image from — I.B.M. featured a Charlie Chaplin look-alike. software and hardware that goes worldwidetoplar or notebook liability PC sales, resultingcomputers with 5.6 from made percent theby tomers“The usePC divisionstechnology of to H. increase P. and topuniquenesserating orBoston notebook models to Scientific, a systemcomputers into a basedlike global made this in pres- thatNa- by velopment,withI.B.M.”“The Forrester Ms.PC Mashboxx, Fieringdivisions Research. wrote, of has H. “are “There’s been P. and vul- in “I just view this as an exercise in andtransmission transformed of unauthorizedit into a subscrip- con- gleefullyRoxio, which promoting bought Apple Napster’s Comput- fa- Mr. Fanning also had the advan- range of desktop, laptop and notebookonly computers logical choice made for by global I.B.M. vendors sitionedtrysearch whatto prove report. to could leverage at a be And trial a multibillion-dol-their shethat noted strongBoston that lo- basisworld.Still,Toshiba for in Taxus. the semiconductor 561 3.7 indus- Lenovoagainstvanced has variousMicro had Devices, long Boston ties Scientific Intel’swith I.B.M. most andAsia AST, has the increasinglyTaiwan PC maker. become a prominent rival in chip making, has er’s iPods, even placing them in mu- tage of coming in with better connec- into its machines.Mike Mergen/Bloomberg News ofcontract thebreakdown market, manufacturers ofaccording its relationship to around Gartner, with the theI.B.M.” efficiency Ms. Fiering and competitiveness wrote, “are vul- of contractgoesence.”tick, beyond Mass., manufacturers it reported being a peer-to-peer$686 around million the I.B.M.”discussionsgoingnerable to Ms.to havebeing Fiering to toplugspun be wrote, off Snocap’s some if their “are sort drag soft- vul- of R.I.A.A. propaganda,” said Fred Von tiontent. music service. mous name at a bankruptcy auction bleeding profits and struggling for cal-marketScientific violated standing contractual and low-cost ob- op- try,ButLeslie Intel he and saidFiering, I.B.M. that aMedinolstill research have could big vicefac- Itcounterclaims. got its start in 1984 as a distributor major hub for technology manufac- a leading-edge plant in Germany. sic videos. The rock band U2, in a tions than the ones he had as a North- A sale of the unit, should it materialize, Ais saleexpected of the to personalinclude the computer entire theworld.Medinol market, research the Israeli firm. company Dell was it theirnerablelar businesses. liability to being spun resulting As off part if their from of drag that the world.system.”AsiainApple revenue has increasingly from its 510 rapidly become3.3 grow- a nerablewareuniquenessonprominent margins into to being itsrivalto anda system, spun systemin chip profitability off according likeifmaking, their this drag that arehas to Lohmann,velopment,Asia has a Mashboxx,lawyer increasingly at the has Electronic become been in a prominentWhen“I just Mr.view rival Fanning this in chipas beganan making, exercise making has in and transformed it into a subscrip- share,” she wrote in a recent re- eratingligations models to work intowith ait global on future pres- toriestrypresident to prove in the at at UnitedGartner, a trial States, that has Bostonpredicted and Ad- of personal computers from I.B.M. Citigroupturing. More and more chipWeighs making Personal Options computer making has deal brokered by its record label, en- eastern University dropout sur- business would be a step away from theLeslieworked leader Fiering, with with in 16.8 1995 a percent researchto get into of vicethe strategy,on breakdown margins he andof bought its profitabilityrelationship Pricewater- with are majorLeslieTheingSony hub stentexisting Fiering, for business technology networks a 295 research in the manufac- have1.9 third vice at- onpeoplegoesdeemeda leading-edgeHe margins beyond did,in toothe however, music itgreat and plant being profitabilityindustry by in dismiss a Germany. their peer-to-peer involved parent all are majorFrontierdiscussions hub Foundation, for to technology plug referring Snocap’s manufac- to soft- the atheR.I.A.A. leading-edge rounds propaganda,” of the plant major in Germany.said labels Fred to talkVon tion music service. range of desktop, laptop and notebook computers made by I.B.M. search report. And she noted that ence.” vancedScientificconsolidation Micro violated in Devices, the contractual PC industry Intel’s ob- most over and AST, the Taiwan PC maker. is done in the contract factories, like followed the same path to Asia, espe- dorsed a line of iPods. rounded by Silicon Valley venture I.B.M.’s traditional emphasis on the worldpresidentstent market, business. at Gartner, and Hewlett-Packard, has predicted productshouseCoopersdeemedMedinol in too, ways the greatConsulting Israelithat by would their companyfor allow $3.5 parent bil- it presidenttractedturing.quarter. More millions at Boston Gartner,and ofmore fans Scientific has chip hungry predicted making filed for deemedracketeeringinsystem.”companies.” thePersonal talks. too computer great and otherby their making claims parent has turing.Recordingware into More its Industry and system, more Association accordingchip making ofto upLohmann,Personal his newest a lawyercomputer creation at the in making theElectronic middle has When Mr. Fanning began making the nextWORLDWIDE few years. Taiwan Semiconductor, and at new cially in the case of notebook ma- The industry’s turnabout with Mr. capitalists in the dot-com boom. Sno- size of its revenue as a measure of its whichconsolidationJudge has absorbed Alvin in the K. PC Compaq Hellerstein industry Com- over of Medinollion,companies.”worked in a to deal claim with that in royalties 1995 closed to get inon OctoberintoBos- the consolidationfreeligationsis donecounterclaims music in to the work andin contract the with movies, PC charging it industryfactories, on andfuture theirover thatlike companies.”againstfollowedButTheIn the even existingthe the meantime, last same if licensedtwo networks path individual she to file-sharing said, Asia, have de- Asianespe- at- isAmerica.people done inin thethe Mr. music contract Von industry Lohmann factories, involved repre- like followedofFrontier last year, theFoundation, same he waspath referring togreeted Asia, toespe- with the the rounds of the major labels to talk Judge Narrows Scope of Suit “Exiting the market may be the Offoundries Asset in China. Managementchines made in ChinaUnit and Taiwan. Fanning is not much different. cap has been receiving advice from corporate power. The PC business puter,theFederal next had few 15 District years.percent. Court in Manhat- ton2002.MusicInstent Scientific’s the business. meantime, stents Industry she or said, other Asian theparentproductsTaiwan Turns MedinolnextDell companiesfew Semiconductor,in ways wasyears. responsiblethat 8,050to have would andCreator generated18.0 allow for at% new the fendantsfailstractedvendorsciallyIn the commercially, in millions likeof meantime, inthe Lenovo the caseNapster case:of of fans“appear she music notebook Peter said, hungry well execu- Asian M. ma- po- for forTaiwansentsin the talks. StreamCastAssistance Semiconductor, Networks, and at new the ciallyskepticismRecording in the Industry in case some of Association quarters.notebook ma- But of up his newest creation in the middle only logical choice for global vendors Still, in the semiconductor indus- Lenovo has had long ties with I.B.M. Months after Napster Inc., which he Hilary Rosen, the longtime chief ex- represents about 12 percent of A“Exitingtan sale issued now, the anif marketit 84-page happens, may ruling would be yes- thebe monetaryvendors“Palmisano’sJudge like damages. AlvinLenovo getting K. “appear Hellerstein out ofwell busi- po- of revenueMedinolfoundries“Exitingbreakdown toby in claim theshowering China. in market theroyalties relationship. users may on with Bos- be thead- vendorsNicholas,tivesfreesitionedchines music are made like to privately leverage Lenovo Boston and in China movies, delighting“appear their Scientific’s and andstrong well Taiwan. in their po-the lo- foundriescompanyBut even in that China. if licensed releases file-sharing Morpheus chinesseveralAmerica. made executives Mr. in Von China Lohmann said and the Taiwan. lasting repre- of last year, he was greeted with Mike Mergen/Bloomberg News onlybleeding H.P.logical profits choice and for 7,176 global struggling 16.1 vendors for try, Intel and I.B.M. still have big fac- andIt got commercial its start in 1984insurance as a distributor products. helped found, emerged in 1999, the ecutive of the R.I.A.A. who is a politi- Judge Narrows I.B.M.’sScope annual revenueof Suit of $92 billion. consistentonlyterday logical thatwith choice narrowed the forstrategy global the scopepursuedvendors of nessessitionedHeFederal also that to ruled District leveragearen’t that growth Court their a manufac- in opportuni- strong Manhat- lo- vertisements.tonStill, Scientific’sJudge in theHellerstein’s semiconductor Snocap stents orruling executives, other indus-dealt sitionedchairmanpublic-relationsparentcal-marketableLenovo for companieshascopyright to and leverage standinghad former long value violations. haveand theirties chief oflow-cost with generatedstrong exec- working I.B.M. op- lo- software.fails“fingerprinting”ContinuedStill, commercially, in “IftheFrom you semiconductor First technology care Business music about not execu-indus- Page copy- un- Lenovopowersents of StreamCasthas Mr. had Fanning’s long ties Networks, original with I.B.M. file- the skepticism in some quarters. But OverMike Boston Mergen/Bloomberg NewsScientificA sale of the unit, Stents should it materialize,Continued is expected From toMike First include Mergen/Bloomberg Business the entire Page News share,”I.B.M. she wrote 2,696 in a recent6.0 re- tories in the United States, and Ad- “Thereof personal has been computers a move in from profitabil- I.B.M. major labels sued it for copyright in- cal commentator and strategist. For nearly a decade, though, some Musicbybleeding the Samuel dispute profits J. Palmisano,and andIndustry he struggling scheduled who be- for a turingtiescal-market Turnstan and lineissued concentrating thatstanding an Boston 84-page to and Scientific low-cost rulingCreator on what yes- op- bleedingwhomonetarytry,with Inteldeclined ofa profitsand damages. range toI.B.M. Napster comment and of still motions struggling have for thisbig by fac- theforar- forcal-marketutive,withrevenueeratingIt Thegot their its andnetworksAssistance modelsbystart onetime Lawrence standingshowering in have1984 into legal and asC. alongusers nemesis. aglobal Best,low-cost distributor argued with the pres- op-ad- — try,right,”tiveslike Intelthe are hesort and privately added, thatI.B.M. Snocap “whystill delighting have relies would big in on fac- you the — Itsharingcompany got its start concepts that in 1984 releases intrigued as a distributor Morpheus them several executives said the lasting A sale of the unit, should it materialize, is expected to include the entire Arangeshare,” sale of she desktop,the wroteunit, laptopshould in a and recentit materialize, notebook re- computers is expected made to include by I.B.M. the entire share,”search report. she wrote And in she a recentnoted that re- vanced Micro Devices, Intel’s most ityand from AST, manufacturingthe Taiwan PC maker. to distribu- fringement. Said David Munns, vice chairman industry analysts have urged I.B.M. camewithoutmeeting I.B.M.’s a in trial. January chief He executive to dismissed set the early date secretlyI.B.M.eratingterday does models built that best,’’ innarrowed Irelandinto said a Markglobalthe to makescope Stahl- pres- of ticle,AtoriesHeparties softwareFujitsu argue also in the to ruled that dismiss United that the program1,735 networkStates,various a manufac- 3.9 and claims opera- Ad- eratingcompany’svertisements.ence.”andof “We personal a sort modelsfederal chief of computers liked Snocapfinancial into appeals the a global ironyfrom executives,officer. court ofI.B.M. pres- has the torieswantpublic-relationsa technique to in thedrive United that people value tracks States, to of more the andworking sonic Ad- off- ofenoughsoftware. personal to listen “If computers you to his care latest from about idea. I.B.M. copy- power of Mr. Fanning’s original file- search report. And she noted that searchable for report.copyright And violations. she noted that “fingerprinting” technology not un- flicts inherent in full service invest- tion,” Mr. Weil said then. Napster tried to filter out some un- of the music giant EMI Group, “It’s rangeOver of desktop, Boston laptop and notebook Scientific computersBy BARNABY made Stents by J. I.B.M. FEDER rangeMedinol’s of desktop, claim that laptop Boston and Sci-notebooktheman,wayence.” computersthe Medinol-designedto an attract dispute analyst made paying and at Carrisby he music I.B.M. stents scheduled & fans. Compa- vio- a torsturingvanced Acer are, line Micro in that the Devices, Boston end, 1,620 entrepreneurs Scientific Intel’s 3.6 most ence.”wholewhoagreedand AST,declined thing,” — the that Taiwan tosaid theycomment one PC cannot executive, maker. for monitorthis ar- re- vancedshore,withcharacteristics their encrypted, Micro onetime Devices, of music legal anonymous nemesis. Intel’sfiles. kindsmost andright,”“This AST, he isthe added, aTaiwan world “why PC of maker. very would short you sharing concepts intrigued them Continuedfor a trial From that First he saidBusiness should Page be- The networks have long argued — like the sort that Snocap relies on — ment banks managing a mutual fund Having presided over the sale of authorized songs using an acoustic never too late to go straight.” latedny.“If “PC’s what the are termsthey’re not of wherelooking their the for agree- growthis free, whosecretlythat will can be built persuaded help in Ireland detect that to changing make callingticle,their users. argue an earlyBut that the the meeting music network companies with opera- Mr. of “WeButnetworks? a sort judge’s of That’s liked ruling all the forced this irony would the of net- theac- memories,”want to drive one people music to more executive off- enough to listen to his latest idea. entificgin promptly. stole its design and trade A meetingsoftware in January program to set the date and Toshiba a federal appeals 1,619 court3.6 has a technique that tracks the sonic business are “going to produce some truck leasing business, Mr. Willum- without a trial. He dismissed is.”then they’re not likely to partici- tothe a Medinol-designedSnocap-driven business stents is vio-a wis- Fanning,torsmay are,argue who in that the declined Snocap end, entrepreneurs proves to comment that it complish.”wholework outthing,” of service said one in executive,mid-2001. Mr. re- said.shore, “If encrypted, you held grudges anonymous you would- kinds “This is a world of very short By BARNABY J. FEDER Time is running out for Boston waysecrets toMedinol’s attract to create paying lawsuit, the music filed Express fans. in April ment,for a leaving trial that it he to said Medinol should to be- agreedNEC — that they 1,221 cannot 2.7 monitor characteristics of music files. changes over the next few years.” stad is taking a close look at the asset Medinol’s claim that Boston Sci- pate,”To trim said costs, Josh Bernoff, I.B.M. has an steadily analyst erpirated path to profit. music files. forwhois possiblethis will article. be persuaded to track andthat blockchanging the callingFanningThere an is became no early dearth meeting a of consultant examples with Mr. forof n’tof networks? last two minutes That’s inall this this industry.” would ac- memories,” one music executive Scientific to resolve voluntarily stent“IfofJudge whatline,2001, whichthey’reis seeking later lookingNarrows royaltiesbecame for is the offree, up thatproveScopegin damagespromptly.can help fromof thedetectSuit action at theirlated users. the terms But the of music their companies agree- But a judge’s ruling forced the net- Senior2 Citigroup executives ac- management business. He now runs entific stole its design and trade retreatedwith Forrester from theResearch. manufacture “There’s of MusicFor the moment, Industry however, there totransmission TurnsPerhapsa Snocap-driven more of important, unauthorized businessto Creator isthe a roll-wis- con- howFanning,Roxio, technological whichof who boughtdeclinedNapster shifts Napster’s have to comment left the fa- forcomplish.”Mr. Assistance Fanning “was popularly said.COMPANY “If you held NAMES grudges you would- Judge Narrows Scopewhat could beof a multibillion-dol-Suit thenbasisJudgeto they’refor 23 Taxus. percent not onNarrows likely every to Express partici- aScope trial.Medinol’s lawsuit,of Suit filed in April mayment,Source: argue leaving IDC that WW Snocap it Quarterly to Medinol proves PC Tracker that to it work out of service in mid-2001. Mr. knowledge that the asset manage- the division in his capacity as the Time is running out for Boston secrets to create the Express Music Industryitsgoing Turns PC’s. to In have January to beto 2002, some Creator it sold sort its of Musicappears of little chanceNapster Industry that the most foroutertent. Turns path of Snocap Assistanceto profit. may to figure Creator in the in- recordingformous this name article.of industry at Napstera bankruptcy unsure of auction where forthoughtThere Assistance ofis asno adearth dragon of slayer,examples when of n’t last two minutes in this industry.” lar liability resulting from the pate,”Butand saidheTaxus said Josh stent that Bernoff, MedinolBoston an Scientific could analyst piratedBostonof 2001, Scientific is music seeking said royaltiesfiles. that its ofli- up isprove possible damages to trackfrom the and action block at the Fanning became a consultant for ment business, which through the head of Citigroup’s global invest- stent line, which later became the desktopuniqueness PC to manufacturinga system like this opera- that popularvelopment, file-sharing Mashboxx, networks, has been like in dustry’sFor“I just the bidview moment, to this reverse as however, an aexercise series there ofin toableand Perhapsturn. transformedfor Incopyright 1998, more the important, violations. it major into a music subscrip- the roll-cor- inhow“fingerprinting” reality technological that wasn’t technology shifts his have intention” notleft the un- Mr. Fanning “was popularly Scientific to resolve voluntarily breakdown of its relationship with withtryhasOver to Forrester prove sold. at Taxus a BostonResearch. trial quickly that Boston “There’s became Scientificability,to 23 if percent any, would Stents on every be minimal Express transmissionaContinued trial. From of First unauthorized Business Page con- Roxio, which bought Napster’s fa- first nine months of this year contrib- ment management division. basis for Taxus. tionsgoes in beyond the Untied it being States a peer-to-peerand Europe Kazaa,discussionsable for willcopyright toembrace plug violations. Snocap’s the software, soft- lossesappearsR.I.A.A.“fingerprinting” in propaganda,” little court, chance where technology said that the majorFred the not most Von un- la- ableporationsouttionThe ofmusicfor networks Snocap copyright suedservice. may have (unsuccessfully) violations. figure long argued in the in-— to “fingerprinting”withrecordinglike the Napster, sort industry that said technologySnocap unsure Larry relies of Kenswil, not where on un- — thought of as a dragon slayer, when whatOver could be Boston a multibillion-dol- ScientificMedinol, the IsraeliStents company it goingScientificOverthe to market haveviolated toBoston leader contractual be some once sort it ob- was Scientific of becauseand Taxus no stents stent Stents fromBoston that Scientific se- tent.Boston Scientific said that its li- mous name at a bankruptcy auction uted a mere 2.2 percent to the com- Mr. Willumstad assumed that po- But he said that Medinol could Continued From First Business Page towithoutsystem.” Sanmina-SCI, a trial. based He dismissed in San Jose, whichContinuedHewlett-Packard,wareThe intomeansnetworks From its the system, Firsthave industry a Businesslong according broad-based mayargued Page have — to belspopularALohmann,like softwarethe have sort file-sharing a been lawyerthat seeking Snocap program at networks,the verdictsreliesElectronic on like to— blockdustry’sandTheWhen a thenetworks federal Mr. bidrelease Fanning to have reverse appealsof Diamond long began a courtargued series making Multi- has — of likepresidenttoa turn. technique the Insort 1998, of that that the UniversalSnocap tracksmajor relies music the Music’s on sonic cor- — in reality that wasn’t his intention” lar liability resulting from the worked with in 1995 to get into the uniquenessligationscleared to towork for a system use with in it like on the futurethis United that velopment,cretCalif.has line I.B.M. sold. were Mashboxx,now Taxus ever confines quicklysold, has aits claim beenbecame role in ability,“I just if view any, this would as bean minimalexercise in and transformed it into a subscrip- pany’s overall profits, is not a core sition in October after Thomas W. trywithout to prove a at trial. a trial He that dismissed Boston By BARNABY J. FEDER withoutMedinol’sAThe software existing a claim trial. networks that Heprogram Boston dismissed have Sci- at- totechnologywaypeopleand rely to a inattract on federal the ancompany music paying upstart appeals industry where music network court PC’sfans.involved with are has AholdKazaa,Frontiera techniquesoftware the will Foundation, companies embrace that program tracks referring the behind thesoftware, to sonic the andmedia’slossesagreedthe rounds a in federal—portable court, thatof the they where appealsmajorMP3 cannot player, the labels court major monitor sayingto talk has la- aeLabsporationscharacteristics technique division. sued that of “He’s (unsuccessfully) music tracks taken files. the that sonic ex- to with Napster, said Larry Kenswil, breakdown of its relationship with goesproductsStates beyond inthis ways ityear. being that Stents would a peer-to-peer are allow metal discussionsMedinolPC’sthe to market designdisputed. to and plug leader product Snocap’s once develop- it soft- was R.I.A.A.because propaganda,” no stents from said that Fred se- Von tion music service. business. They say that managing Jones was fired by Mr. Prince for his By BARNABY J. FEDER stent business. way to Byattract BARNABY paying musicJ. FEDER fans. entifictracted stole millions its design of fans and hungry trade for wayfewonlyinagreed “Ifthe to customers.part what talks. attract — of they’re that a payingmuch they One looking larger cannotmusic network for business,fans. monitor is in free, de- GroksterwhichthatRecordingcharacteristics meanscan and Industry theMorpheushelp of industrymusic Associationdetect files. networks may have li- of agreeditbelstheirup “promotes his haveusers. newest — that been But the creation they the seekingillicit music cannot use” in verdicts companiesthe of monitor middledigitalI.B.M. to characteristicsperience,blockBut thea judge’s release taken of ruling music aof Diamond step forced files. back the Multi- net- and president of Universal Music’s Medinol, the Israeli company it ScientificMedinol’s violated claim that contractual Boston Sci-ob- system.”Medinol to claim royalties on Bos- Medinol’s claim that Boston Sci- Lohmann,cret line were a lawyer ever at sold, the aElectronic claim When Mr. Fanning began making role in the scandal over Citigroup’s Judge Alvin K. Hellerstein of “Ifmesh what cylinders they’re looking that propfor is openfree, warementfreethatJudgecleared music into out can Hellerstein of its for and itshelp system, use offices movies, also in detect according thein refused and Raleigh, United their to mightthentheir“IfBut whatusers. they’re even face they’re But if pressures not licensedthe looking likelymusic file-sharing similar toforcompanies partici-is free, to thattoAmerica. But rely a can onjudge’s Mr. an help upstartVon ruling Lohmann detect forced network the repre- withnet- theirmoneymusicholdmayof last users.argue thefiles. for year, investorsthatBut companies he theSnocap was music is greetedproves in behind companies essence that with the it a thoughtmedia’sworkBut outa judge’s ofportable of a service way ruling MP3 that in forced player, everyonemid-2001. the saying net- canMr. eLabs division. “He’s taken that ex- worked with in 1995 to get into the ligationsentific stole to work its designwith it and on future trade TheTime existing is running networks out for have Boston at- entificsecrets stole to createits design the and Express trade FrontierMedinol disputed.Foundation, referring to the theAn roundsI.B.M. ofad the campaign major labels that to ended talk in 1987 — seen then as an effort to private bank being barred from op- Federal District Court in Manhat- tonthenblood Scientific’s they’re vessels. not stents likely or to other partici- peopletoN.C.,parent dismissStates with in companies the this allwithout music theyear. I.B.M.-brand trial industry Stents have a number generatedare involved metal desk- thenI.B.M.’s.pate,”failsmay argue they’re commercially, said that Josh not Snocap Bernoff, likely music proves to an partici- analyst execu-that it fewpiratedsentswork customers. out StreamCast of service music One in Networks, network files.mid-2001. in Mr. thede- maymanufacturingGroksterisskepticism Six possible argue years and that toin later,Morpheus trackSnocap some business the and quarters.proves networks industry embedded block that But the li- isit workbenefit.”itFanning “promotes out of became service the illicit ain consultant use”mid-2001. of digital Mr. for perience, taken a step back and stentTime business. is running out for productssecrets in to ways create that the would Express allow tractedScientificTime millions is runningto resolveof fans out hungry voluntarilyfor for secretsstent line, to which create later the became Express the Recording Industry Association of upsoften his newest the company’s creation imagein the middle— featured a Charlie Chaplin look-alike. erating in Japan. Boston tan issued an 84-page ruling yes- monetarypate,”Boston said damages. Josh Scientific, Bernoff, based an analystBoston in Na- inoftoprevenuepirated themesh Medinol’sor talks. notebook by cylinders showering music potential computers that usersfiles. defenses prop made with open ad-by pate,”withtivesis “TheJudge possible Forresterare said PC Hellerstein privately Josh to divisions track Research.Bernoff, delighting also and of an H.refused block “There’s analyst P. in and the piratedcompanyFanning became that music releases a consultantfiles. Morpheus for isingleefullytransmissionseveral an possible institution executives promoting to of track that unauthorized said has Apple and historically the block Comput- lasting con- the FanningmusicRoxio,Mr. files. Fanning which became bought also a had consultant Napster’s the advan- for fa- thought of a way that everyone can Judge Alvin K. Hellerstein of Medinolstent line, to whichclaim royaltieslater became on Bos- the freewhat music could and be movies, a multibillion-dol- and their stentbasis line,for Taxus. which later became the America. Mr. Von Lohmann repre- of last year, he was greeted with While Citigroup’s mutual funds Scientific to resolve voluntarily terday that narrowed the scope of withHeScientifictick, Forresteralso Mass., ruledto reported resolveResearch. that a manufac-$686 voluntarily “There’s million againstcontractvertisements.Butblood even variousvessels. manufacturers if licensed Snocap Boston Scientific file-sharing aroundexecutives, the withI.B.M.”togoingpublic-relationstransmission dismiss Forrester to Ms. have without Fiering of toResearch. value unauthorized trial be wrote, some a of number “are“There’s working sort con-vul- of software.Roxio, which “If you bought care Napster’s about copy- fa- transmissionmadeer’stent.power iPods, its of moneyMr. even Fanning’s of viaplacing unauthorized distribution. themoriginal in con-Andmu-file- Roxio,tagemousSix of name yearscoming which at later, boughtina bankruptcy with the better Napster’s industry connec-auction fa- is benefit.” tonbasis Scientific’s for Taxus. stents or other parentlar liability companies resulting have generated from the basisBut for he Taxus. said that Medinol could sents StreamCast Networks, the skepticism in some quarters. But have not been the target of any regu- Federalwhat could District be aCourt multibillion-dol- in Manhat- the dispute and he scheduled a turinggoingwhatin revenue to line could have that from be to Boston a beits multibillion-dol- rapidly some Scientific sort grow- of failscounterclaims.world.who declinedBoston commercially, Scientific,to comment music based for this execu- in Na-ar- goingnerableofuniquenesswithtent. Medinol’s their to to have onetimebeing to a potential to systemspun legal be off some nemesis.like if defenses their this sort drag that of velopment,right,”mousAsia name hehas added, Mashboxx,at increasingly a bankruptcy “why has would become beenauction you in a tent.now,sicprominentsharing“I videos. just given view concepts rival The that this rockin only chipas intrigued bandan 25 making, exercise percent U2, them inhas ofin a moustionsgleefullyand transformed thanname promotingthe at ones a bankruptcy ithe into Applehad aas subscrip- Comput- aauction North- Mr. Fanning also had the advan- tan issued an 84-page ruling yes- monetaryBut he saiddamages. that Medinol could revenuebreakdown by showering of its relationship users with with ad- tivestryButLeslie to are heprove said privatelyFiering, at that a trial Medinola delighting researchthat Boston could in vice the companyCitigroup that releases Weighs Morpheus several Options executives said the lasting latory action, the division has recent- lar liability resulting from the meeting in January to set the date secretlyuniquenesslaring liability stent built to business ina systemresulting Ireland inlike to from the makethis third that the ticle,velopment,Hetick, argue did, Mass., however, Mashboxx,that reported the network dismiss has$686 been million opera- all in uniquenessonagainstgoes“We “I margins just beyond sort various view to of ita and likedthis systembeing Boston profitabilityas the aan like Scientificpeer-to-peer irony exercise this of that are the in velopment,majordiscussionswantand transformed to hub drive for Mashboxx, to technology people plug it into Snocap’s to has a moremanufac- subscrip- been soft- off- in SmithdealaR.I.A.A.enough leading-edge“I justbrokered Barney to propaganda,”view listen funds bythisplant to its his as areinrecord latest an saidGermany. sold exercise Fredlabel,idea. through Von en- in andeasterner’stion music transformediPods, University service.even placing it into dropout them a subscrip- in sur-mu- tage of coming in with better connec- terday that narrowed the scope of tryHe to alsoprove ruled at a thattrial athat manufac- Boston vertisements.Medinol, the Snocap Israeli company executives, it trypublic-relationspresidentScientific to prove violated at at Gartner, a trial value contractual that has of Boston predicted working ob- software. “If you care about copy- power of Mr. Fanning’s original file- ly become a headache of sorts for breakdown of its relationship with for a trial that he said should be- thegoesbreakdownquarter. Medinol-designed beyond Boston itof beingits relationship Scientific a stents peer-to-peer vio- with filed racketeeringtorsdiscussionsin are,revenue in to the from and plug end, otherits Snocap’s entrepreneursrapidly claims grow- soft- goesdeemedcounterclaims.system.”wholeR.I.A.A. beyond thing,” propaganda,” too itgreatsaid being one by a saidexecutive, their peer-to-peer Fred parent Von re- discussionsturing.wareshore,tion music into encrypted,More service. itsto and system, plug more anonymous Snocap’s accordingchip making kinds soft- to R.I.A.A.itsdorsedLohmann,Personal“This 12,000 a propaganda,” line isthousand a alawyer computerof worldiPods. brokers, at ofsaid the making veryElectronic Fred the origi- short Von has tionroundedsicWhen videos.music Mr. by service. The FanningSilicon rock Valley bandbegan U2, venturemaking in a tions than the ones he had as a North- turingScientific line violated that Boston contractual Scientific ob- whoworked declined with to commentin 1995 to getfor thisinto ar-the Scientificwithconsolidationligations their to violatedonetime work in the with contractuallegal PC it industrynemesis. on future ob- over right,” he added, “why would you sharing concepts intrigued them Mr. Prince. The Securities and Ex- theMedinol dispute, the and Israeli he scheduled company a it gin promptly. latedsystem.”Medinolcounterclaims the , terms the Israeli of charging their company agree- that it againstwhowareing will into stentthe be itslastpersuaded business system, two individual that accordingin thechanging de- third to system.”companies.”callingLohmann,HeThe did, existing an a however,early lawyer networks meeting at dismissthe Electronic withhave all Mr. at- wareisCitigrouppeopleof doneWhennetworks? into in in Mr.the the its music FanningThat’scontract system, industry all began factories,this accordingWeighs would involved making like ac- to Lohmann,nalfollowedFrontiermemories,”The cross-selling Options industry’s theFoundation, a lawyersame one premise turnabout path music at referring the to thatElectronicAsia, executivewith under- toespe- Mr. the capitalistsdealtheWhen rounds brokered Mr. inof Fanning the by dot-commajorits record began labels boom. label, making to Sno-talk en- eastern University dropout sur- secretly built in Ireland to make ticle, argue that the network opera- ligationstheproducts“We next sort few toin workways ofyears. liked withthat the wouldit onirony future allow of the want to drive people to more off- enough to listen to his latest idea. change Commission is investigating meetingworked within January in 1995 to to set get the into date the ligations to work with it on future ment,TheworkedMedinolstent leaving existing business. with was in it responsiblenetworks 1995 to Medinolto get have into for to the at- fendantstopeople aquarter. Snocap-driven in the in Boston themusic case: businessindustry Scientific Peter involvedis a M. filedwis- OfracketeeringtractedFanning,FrontierTheIn the existingAsset millions Foundation, meantime, who and declined networks of other fans she referringManagement to said, hungry claims commenthave Asianto at-thefor peopleTaiwanincomplish.”the the rounds talks. in Semiconductor,the of music the Unitmajor industry labels and involved at to newtalk FrontierpinnedFanningciallyRecordingsaid. “If inthe youFoundation, the isacquisition Industry held case not grudges muchof referring Association notebookof Smith you different. would- to Bar- ma-the of thecapdorsedup hisrounds has newesta been line of ofthe receivingcreation iPods. major in labels advice the middleto from talk rounded by Silicon Valley venture Medinol’s lawsuit, filed in April tors are, in the end, entrepreneurs Medinol to claim royalties on Bos- shore, encrypted, anonymous kinds “This is a world of very short whether the asset management busi- forstent a trialbusiness. that he said should be- theproducts Medinol-designed in ways that would stents allow vio- provetractedstentJudge damages business. millions Alvin from of K. fans the Hellerstein action hungry at for of productswholeer“Exiting path thing,” to in profit. ways the said market that one would executive, may allow be there- tractedvendorsagainstfreeforRecording this music article. themillionslike last IndustryLenovo and two of movies, fansindividual“appear Association hungry and well de- their forpo- of foundriesupButThere his newest even is in no China. if dearth creation licensed of in examples file-sharingthe middle of RecordingneyMonthschinesAmerica.n’t last in 1987, two madeafter Mr. minutesmay Industry Napster in Von no China longer in Lohmann Association thisInc., and hold.industry.” which Taiwan. repre- he of upHilaryof Thehis last newestindustry’s Rosen, year, creationthe he turnabout waslongtime in greeted the chiefwith middle with Mr.ex- capitalists in the dot-com boom. Sno- of 2001, is seeking royalties of up whobreakdown will be persuaded in the relationship. that changing Nicholas,in thecounterclaims talks. Boston charging Scientific’s that of networks? That’s all this would ac- inmemories,” the talks. one music executive ness, on Mr. Jones’ watch, received ginJudge promptly. Alvin K. Hellerstein of latedMedinol the to termsclaim royalties of their on agree- Bos- freeFederal Judge music District Alvin and movies, K. Court Hellerstein in and Manhat- their of MedinolcallingonlytonFor logical Scientific’s the anto claim moment,earlychoice royalties stents meeting for however, global or on with othervendorsBos- there Mr. freesitionedparentAmerica.Perhaps music companies to Mr. more leverage and Von important, movies, Lohmann have their andgenerated strong the repre- their roll- lo- andOffailshowof Still, last commercial technological commercially, inAsset year, the hesemiconductor insurance wasshifts musicManagement greeted have products. left execu- indus- with the America.helpedLenovosentsLastMr. StreamCast found,has week’s Fanning Mr. had Vonemerged long sale Unit “wasLohmann ties Networks, of in Citigroup’swith popularly 1999, repre-I.B.M. the ofecutiveFanningskepticism last of year, the is in R.I.A.A. henot some was much who quarters. greeted is different. a politi- with But cap has been receiving advice from to 23 percent on every Express a trial.Judge Hellerstein’sMike Mergen/Bloomberg ruling dealt News chairmanButMedinol even and was if former licensed responsible chief file-sharing exec- for the fendantsContinued in From the First case: Business Peter M.Page But even if licensed file-sharing inappropriate payments from a ment,ton Scientific’s leaving it stents to Medinol or other to to atan Snocap-driven issued an 84-page business ruling is a wis- yes- tonFanning,bleedingmonetaryappears Scientific’s little profitswhodamages. declinedchance stents and strugglingthat to or comment the other most for complish.”cal-marketrevenueout of Snocap by standingshowering may figureand users low-cost in with the ad-op- in- said.“Theretry,recording Intel “If has you and industrybeen held I.B.M. a grudges move still unsure havein you profitabil- of big would- where fac- truckmajorItcompanythought got its labels leasing ofstart thatas sued a in unit,dragon1984 releases it for as another copyright slayer,a distributor Morpheus when such in- calMonthsseveral commentator after executives Napster and said strategist. Inc., the which lasting he Hilary Rosen, the longtime chief ex- FederalMedinol’s District lawsuit, Court filed in Manhat-in April and Taxus stent Boston Scientific parentBostonFederalwith companiesa Scientific rangeDistrict of Courtsaid have motions that in generated Manhat- its by li- the utive,failsbreakdown commercially,and Lawrence in the relationship. C. music Best, execu-the parentNicholas,sents StreamCast companies Boston have Networks, Scientific’s generated the failstivesskepticism arecommercially, privately in some delighting music quarters. execu- in But the sents StreamCast Networks, the skepticismthird-party trust in some bank. quarters. But proveAmonetary sale damages of the damages. unit, from should the action it materialize, at er pathis expected to profit. to include the entire monetaryforshare,”popularHe this also article. she file-sharing damages. ruled wrote that in networks,a a manufac- recent like re- eratingvertisements.dustry’sThere modelsis bid no to dearth Snocap reverseinto of a examples global aexecutives, series pres- of of n’titytoriesto turn. last from intwo In themanufacturing 1998, minutes United the majorin States, this to industry.”music distribu- and cor- Ad- “manufacturingfringement.ofandsoftware.in realitypersonal commercial “Ifthat computers you wasn’t insurance business,’’ care his fromabout intention”products. to I.B.M. copy- Gen- helpedpowerSaid of David found, Mr. Fanning’sMunns, emerged vice original in chairman 1999, file- the ecutive of the R.I.A.A. who is a politi- oftan 2001, issued is seeking an 84-page royalties ruling of yes- up has sold. Taxus quickly became ability,revenuetanpartiesterday issued if by any,thatto showering dismiss an narrowed would 84-page various beusers the minimal ruling scopewith claims yes- ad- of company’stives Judge are privately chiefHellerstein’s financial delighting ruling officer. indealt the revenuechairmancompany by and thatshowering former releases userschief Morpheus withexec- ad- tivespublic-relationsseveralContinued are executives privately From First value delighting said Business of the working lasting in Page the company that releases Morpheus severalAs for executives the unit’s said performance, the lasting it arange trial. of desktop, laptop and notebook computersFor the moment, made by however, I.B.M. there searchturingKazaa,Perhaps line report.will more that embrace And Bostonimportant, she the Scientific noted software, the roll- that howflictswho technologicaldeclined inherent to in comment fullshifts service have for leftthis invest- thear- tion,”vancedporationsMr. Mr. MicroFanning Weil sued said Devices, (unsuccessfully) “wasthen. Intel’s popularly most to eraland“Thereright,”withNapster AST, Electric Napster, has he the tried been added, Taiwanfor saidto a$4.4 movefilter “why PCLarrybillion, outinmaker. would profitabil- some Kenswil,was youtheun- ofmajorsharing the musiclabels concepts suedgiant itEMI intriguedfor copyrightGroup, them “It’s in- cal commentator and strategist. toterday 23 percent that narrowed on every the Expressscope of He also ruled that a manufac- becausevertisements.terdaythe dispute nothat stents narrowed and Snocap from he scheduledthe executives,that scope se- of a public-relationsHewith also a ruled range that valueof motions a manufac- of working by the vertisements.ence.”utive,lossessoftware. and in court, “If Lawrence you Snocap where care C. the Best,about executives, major the copy- la- public-relationswithpower their of Mr. onetime Fanning’s value legal nemesis. oforiginal working file- software. “If you care about copy- power of Mr. Fanning’s original file- the market leader once it was appears little chance that the most outwhich of Snocapmeans the may industry figure may in the have in- recordingmentticle, banks argue industry managing that the unsure network a mutual of whereopera- fund thoughtblockHaving the of release presidedas a dragon of overDiamond slayer, the sale Multi- when of itywantpresident from to drivemanufacturing of people Universal to to more distribu- Music’s off- hasenough been to listen less to than his latest extraordinary, idea. andthe Taxus dispute stent and Boston he scheduled Scientific a turingBoston line Scientific that Boston said that Scientific its li- whothemeeting declined dispute in toJanuary andcomment he to scheduled set for the this date ar- a turingsecretlywith their line built onetime that in Boston Ireland legal Scientificnemesis. to make whocompany’sbelsright,” declined have he beenchief added, to comment financial seeking “why verdictsforofficer. would this youar- to withsharing“We their sort conceptsonetime of liked legal intriguedthe nemesis. irony of them the right,”mostauthorized recent he added, songs manifestation using “why an would acoustic of such you sharingneverfringement. too conceptslate to go straight.” intrigued them Said David Munns, vice chairman cleared for use in the United popularcret line file-sharing were ever sold, networks, a claim like dustry’sparties bid to todismiss reverse various a series claims of tobusiness turn. In are 1998, “going the major to produce music some cor- intruckflictsmedia’s reality inherent leasing portable that business,in wasn’t MP3 full service player, his Mr. intention” Willum- invest-saying tion,”eLabs Mr. division. Weil said “He’s then. taken that ex- with Smith Barney mutual funds pro- hasmeeting sold. in Taxus January quickly to set becamethe date ability,secretly if built any, in would Ireland be minimal to make ticle,meetingfor arguea trial in that Januarythat the he networksaid to set should the opera- date be- secretlytheto “We rely Medinol-designed sort on built an of in upstartliked Ireland the stents network ironyto make vio- of with the ticle,torsholdwant are, argue tothe drive in companies that the people the end, network entrepreneurs to behind more opera- off-the wholeenough“We thing,” sort to listen of said liked to hisone the latest executive, irony idea. of the re- wantthinking.shore, to encrypted, drive people anonymous to more kinds off- enoughNapster“This to islisten tried a worldto to his filter latest of out very idea.some short un- of the music giant EMI Group, “It’s States this year. Stents are metal Kazaa,Medinol willdisputed. embrace the software, lossesfew customers. in court, where One network the major in de- la- porationschangeswho will overbe sued persuaded the (unsuccessfully)next few that years.” changing to withstadmentit “promotes is Napster,banks taking managing thea saidclose illicit Larrylook ause” mutual at of Kenswil,the digital asset fund ofperience, Havingnetworks? presided taken That’s a overall step this theback would sale andac- of ducingmemories,” a cumulative one music five-year executive return thefor a market trial that leader he said once should it was be- becausethe Medinol-designed no stents from stents that vio- se- torsforgin are, apromptly. trial in thethat end,he said entrepreneurs should be- thelatedwhole Medinol-designed thething,” terms said ofone their stentsexecutive, agree- vio- re- torsGrokstershore, are, encrypted, inand the Morpheus end, anonymous entrepreneurs networks kinds li- wholecalling“This thing,” an is early a said world meetingone ofexecutive, very with short Mr. re- shore,The encrypted,comments ofanonymous Robert B. kinds Wil- authorized“This is songsa world using of an very acoustic short never too late to go straight.” mesh cylinders that prop open whichJudge means Hellerstein the industry also refusedmay have bels have been seeking verdicts to blockSenior the release Citigroup of Diamond executives Multi- ac- presidentmanagementbusinessmusic files. are of “going business. Universal to produce He now Music’s someruns truckthought leasing of a way business, that everyone Mr. Willum- can of 1.86 percent, according to Morn- cleared for use in the United cretlated line the were terms ever of sold, their a agree- claim who willMedinol’s be persuaded lawsuit, that filed changing in April latedment,calling the leaving an terms early it of meeting to their Medinol agree- with to Mr. whotoof networks?a willSnocap-driven be persuaded That’s business all that this changingwould is a wis- ac- callingFanning,memories,” an who early one declined meeting music to withexecutivecomment Mr. oflumstad,complish.”COMPANY networks? Citigroup’s That’s NAMES all chief this operatingwould ac- memories,”said. “If you held one grudges music you executive would- gin promptly. Judgeblood vessels. Narrows totoScope dismiss relygin promptly. on without an upstart of trial Suit network a number with hold the companies behind the media’s portable MP3 player, saying eLabsthechanges division division. over inthe “He’s his next capacity few taken years.” that as ex-the stad is taking a close look at the asset ingstar. Such a figure ranks behind Medinol disputed. to a Snocap-driven business is a wis- ment,MusicproveFanning, damages leaving who declined itfrom Industry to the Medinol to action comment toat toknowledgeercomplish.” Turns apath Snocap-driven to profit. that the businessto asset Creator manage-is a wis- Fanning,forsaid.Six this “If years article. of you who held later, declinedNapster grudges the to industry you comment would- is forcomplish.”officerbenefit.”There andAssistance is ano longtime dearth ofdisciple examples of Mr. of said.n’t last “If two you minutes held grudges in this you industry.” would- StatesMedinol’s this year. lawsuit, Stents filed are in metal April ment, leaving it to Medinol to fewof of Medinol’s customers.Medinol’s 2001, is seeking potentiallawsuit, One networkroyalties filed defenses in in Aprilof de-up Grokster and Morpheus networks li- it “promotes the illicit use” of digital perience,head of Citigroup’s taken a step global back invest- and management business. He now runs investment banks like Merrill Lynch Boston Scientific, based in Na- er path to profit. afor trial. this article. erment ForpathThere business, theto is profit. moment,no dearth which however,of throughexamples there the of forgleefullyn’tSeniorPerhaps thislast article.two promoting Citigroup moreminutes important, in Appleexecutives this industry.” Comput-the roll- ac- Weill,howThereMr. technological Fanningare is no instructive dearth also shifts hadof asexampleshave the well. left advan- the Heof n’tMr. last two Fanning minutes “wasin this industry.” popularly meshof 2001, cylinders is seeking that royalties prop of open up proveJudge damages Hellerstein from alsothe action refused at againstofto 2001, 23 various percent is seeking Boston on everyroyalties Scientific Express of up prove damages from the action at music files. thoughtment management of a way that division. everyone can andCOMPANY Morgan Stanley. NAMES tick, Mass., reported $686 million For the moment, however, there Perhaps more important, the roll- firstappearshowFor ninetechnological the littlemonths moment, chance of shifts this however, that year have the contrib- left there most the ableknowledgeouter’sPerhapsMr. of iPods,for Snocap copyright Fanning moreeven that may placing important,the violations. “was figure asset them popularlyin manage-the thein roll-mu- in- howstated“fingerprinting”therecordingtage technological divisionof atcoming the industry in time in his technology withshifts that unsure capacity better thehave ofsale connec- notleft as where wasthe un-the thoughtMr. Fanningof as a dragon “was slayer, popularly when bloodto 23 vessels. percent on every Express toa trial.dismissOver without Boston trial a number Scientifictoand 23 Taxus percent stent onStentsBoston every Scientific Express a trial.Boston Scientific said that its li- Six years later, the industry is benefit.”Mr. Willumstad assumed that po- Despite these issues, analysts say in revenue from its rapidly grow- counterclaims.appears little chance that the most outContinued of Snocap From may First figure Business in the Page in- appearsutedpopularrecording a mere little file-sharing industry 2.2 chance percent unsure networks, that to thethe of where most com- like outmentdustry’ssicthoughtThe ofvideos. business,Snocapnetworks of bid as The to a may dragonhave reverserock which figure long band slayer, through a argued in series U2, the when in the in- — of a recordingdrivenlikeheadtotions turn. the than ofby Insort Citigroup’s the industry1998, the that ones bank’s the Snocap he major unsure had driveglobal relies asmusic of toa invest- whereNorth- “allo-on cor- — thoughtin reality of thatas a wasn’tdragon his slayer, intention” when andBoston Taxus Scientific, stent Boston based Scientific in Na- of Boston Medinol’s Scientific potential said that defenses its li- andhas Taxus sold. Taxusstent Boston quickly Scientific became ability,CitigroupBoston if Scientific any, would said be that Weighs minimal its li- gleefully Options promoting Apple Comput- sitionMr. Fanningin October also after had Thomas the advan- W. that the business could draw signifi- ing stent business in the third popularHe did, file-sharing however, dismissnetworks, all like dustry’s bid to reverse a series of popularpany’sAKazaa,to turn. software overallIn will file-sharing 1998, embrace profits,the program major networks, the is notmusic software, a core likecor- dustry’sandfirstlossesdealin reality ninebrokered a in federal bidmonths court, that to by wasn’t wherereverse appealsofits this record histhe year a court intention” majorserieslabel, contrib- has en- la- of tocateamentporationseastern turn. technique management capitalIn University1998, sued that the (unsuccessfully) most major tracksdivision. dropout music effectively the sonic cor- sur- to inwith reality Napster, that wasn’t said Larry his intention” Kenswil, tick,has sold.Mass., Taxus reported quickly $686 becamemillion againstability, ifvarious any, would Boston be Scientific minimal withouthasthe sold. market a trial. Taxus leader He quickly dismissed once became it was ability,because if no any, stents would from be minimal that se- er’s iPods, even placing them in mu- tageJones of was coming fired in by with Mr. better Prince connec- for his cant investor interest. Asset man- quarter.By BARNABY Boston Scientific J. FEDER filed racketeeringKazaa, will embrace and other the claims software, waylosses to attract in court, paying where music the major fans. la- Kazaa,business.whichporations means will They sued embrace the say (unsuccessfully)industry that the managingmay software, have to lossesagreedutedbelsdorsedwith a have Napster, in merea — line court, that been of2.2 iPods.saidthey wherepercent seeking Larrycannot the to verdicts major the Kenswil, monitor com- la- to porationsthroughoutcharacteristicsblockroundedMr. the Willumstad byrelease sued our Silicon of (unsuccessfully) music businesses.”of assumed Diamond Valley files. that venture Multi- Citi- po- to withpresident Napster, of said Universal Larry Kenswil, Music’s inthe revenue market from leader its rapidly once itgrow- was counterclaims.because no stents from that se- Medinol’sthecleared market claim for leader use that in Boston once the it Sci-United was becausecret line no were stents ever from sold, that a claim se- sic videos. The rock band U2, in a tionsrole inthan the the scandal ones he over had as Citigroup’s a North- agement businesses now trade at counterclaims charging that againstwhich means the last the two industry individual may de- have bels“If havewhat they’re been seeking looking verdictsfor is free, to whichmoneythattoblock rely themeans can for on release investorsan thehelp upstart industry of Diamond isdetect network in may essence Multi- have with a belstheirpany’sholdpresidentThe haveusers. theindustry’s overall been But companies of profits,the seekingUniversal turnabout music is behind verdicts companies not with Music’s a coreMr. the to blockgroupsitionmedia’scapitalistsBut thea inexecutives judge’s portable Octoberrelease in the ruling dot-com MP3 of also after Diamond forcedplayer, said Thomas boom. that the sayingMulti- Sno-net- the W. presidenteLabs division. of “He’sUniversal taken Music’sthat ex- ing stent business in the third cretHe line did, were however, ever sold, dismiss a claim all CitigroupentificStates stole this its year. design Stents andWeighs are trade metal cretMedinol lineOptions disputed. were ever sold, a claim deal brokered by its record label, en- easternprivate bank University being barred dropout from sur- op- price to earnings multiples that ap- cleared for use in the United Medinol was responsible for the fendantsto cleared rely on in an for the upstart use case: in network Peter the United M. with thenOfhold they’re theAsset companies not likely Management behind to partici- the tomanufacturingfewmedia’s rely customers. on portable an upstart business One UnitMP3 network player, network embedded saying in with de- holdmaybusiness.GroksterFanningeLabs argue the division. and They isthat companies Morpheus not Snocap “He’s say much that taken proves behind networks managing different. that that the ex- li-it media’sdivisionworkJonesitcap “promotes has outwas didportable beenof fired notservice the receiving offer by illicitMP3 Mr. incross-selling player, use”mid-2001.Prince advice of sayingdigitalfor from Mr. op-his eLabsperience, division. taken “He’s a step taken back that and ex- racketeeringMedinolTime disputed. is running and other out for claims Boston secretsmesh to cylinders create thethat Express prop open MedinolJudge disputed. Hellerstein also refused dorsed a line of iPods. roundederating in by Japan. Silicon Valley venture proach or even exceed 20 times, a quarter.States this Boston year. Stents Scientific are metal filed breakdown in the relationship. Nicholas,fewStates customers. this Boston year. One Stents network Scientific’s are metal in de- pate,”Grokster said and Josh Morpheus Bernoff,networks an analyst li- fewinpiratedit “promotesan customers. institution music the Onethatillicit has network files.use” historically of digital in de- GroksterismoneyMonthsperience, possible forafter and taken investors to MorpheusNapster track a step is andInc., in networks backessence blockwhich and theheli- a itportunities.FanningrolemusicHilary “promotes in files.Rosen, the became scandal the the illicit longtime a over consultantuse” Citigroup’s ofchief digital forex- perience,thought of taken a way a that step everyone back and can counterclaims charging that againstJudgeScientific the Hellerstein lastto two resolve individual also voluntarily refused de- stentblood line, vessels. which later became the toJudge dismiss Hellerstein without trial also a refusednumber andThe commercial industry’s insuranceturnabout products.with Mr. capitalistshelpedWhile found, Citigroup’s in the emerged dot-com mutual inboom. 1999, funds Sno- the privateecutive of bank the beingR.I.A.A. barred who is from a politi- op- valuation that far exceeds Citi- mesh cylinders that prop open Judge Hellerstein’s ruling dealt chairmanmesh cylinders and former that chief prop exec- open withContinued Forrester From Research.First Business “There’s Page mademusic its files. money via distribution. And transmissionmanufacturingthought of a way of business unauthorized that everyone embedded con- can musicRoxio,ToSix be files. years whichsure, a later, boughtsale of the the Napster’s industryasset man- fa- is thoughtbenefit.” of a way that everyone can fendantswhat could in the be case: a multibillion-dol- Peter M. Ofbasis for Asset Taxus. Managementtoof dismiss Medinol’s without potential Unit trial a defensesnumber Fanning“There has is been not a move much in profitabil- different. caphavemajor has not labels beenbeen sued receivingthe targetit for copyright adviceof any regu- from in- eratingcal commentator in Japan. and strategist. group’s own depressed price earn- Medinolblood vessels. was responsible for the to dismisswith a rangewithout of trial motions a number by the utive,bloodBoston and vessels. Lawrence Scientific, C. based Best, inthe Na- going to have to be some sort of now,Six given years that later, only the 25 industry percent of is tent.inbenefit.” an institution that has historically agementmousgleefullySix name years promotingunit at later, a would bankruptcy the Apple not industry represent Comput- auction is benefit.”Mr. Fanning also had the advan- breakdown in the relationship. Nicholas,of lar Medinol’s liability Boston potential resulting Scientific’s defenses from the Buttick, he Mass., said thatreported Medinol $686 could million ofagainst Medinol’s various potential Boston Scientific defenses Monthsity from after manufacturing Napster Inc., to which distribu- he Hilarylatoryfringement. action,Rosen, thethe division longtime has chief recent- ex- er’sWhileSaid iPods, David Citigroup’s even Munns, placing vice mutual them chairman in funds mu- ingstage ratioof coming of just in with under better 12 times connec- its Boston Scientific, based in Na- parties to dismiss various claims company’sBoston chief Scientific, financial based officer. in Na- anduniqueness commercial to a systeminsurance like products. this that Smithvelopment,gleefully Barney promoting Mashboxx, funds are Apple hassold Comput-through been in made“IMr. just its Fanning moneyview this alsovia as distribution. had an exercise the advan- And in gleefullytheand beginning transformed promoting of theit intoApple unbundling a subscrip- Comput- of Mr. Fanning also had the advan- chairmanbreakdown and offormer its relationship chief exec- with try to prove at a trial that Boston counterclaims.flicts inherent in full service invest- helpedtion,” Mr. found, Weil emergedsaid then. in 1999, the ecutively Napster become of the tried a R.I.A.A. headache to filter who out of is sortssome a politi- un- for havesicof the videos. not music been The giant the rock target EMI band ofGroup, any U2, regu- “It’s in a earnings.tions than the ones he had as a North- tick,Judge Mass., Hellerstein’s reported ruling$686 million dealt against various Boston Scientific Continuedtick,in revenue Mass., From fromreported First its Business rapidly $686 million grow-Page against“Theregoes beyond has various been it being Bostona move a Scientificin peer-to-peer profitabil- itsdiscussionser’s 12,000 iPods, thousand even to plugplacing brokers, Snocap’s them the in origi- soft-mu- R.I.A.A.now,tage of given coming propaganda,” that in only with saidbetter 25 percent Fred connec- Von of er’sCitigroup.tion iPods,music service. Theeven companyplacing them remains in mu- a tage of coming in with better connec- , the Israeli company it Scientific violated contractual ob- mentHe banks did, however,managing dismissa mutual all fund majorCitigroupHaving labels presided sued it overfor copyright Weighs the sale in- of calMr.authorized commentator Prince.Options songs The and Securities using strategist. an andacoustic Ex- latorydealnever brokered tooaction, late the toby go divisionits straight.” record has label, recent- en- easternA general, University if not always dropout accurate, sur- within revenue a range from of its motions rapidly by grow- the utive,counterclaims.Medinol and Lawrence C. Best, the ining revenue stent businessfrom its rapidly in the grow- third counterclaims.itysystem.” from manufacturing to distribu- nalwaresic cross-selling videos. into its The system, premise rock band according that U2, under- in to a Lohmann,Smithtions than Barney thea lawyer onesfunds he atare had the sold asElectronic athrough North- sicdominantWhen videos. Mr. global The Fanning rock banking band began franchise U2, making in a tions than the ones he had as a North- ligationsCitigroup to work with it onWeighs future business Options are “going to produce some Citigroupfringement.truck leasing business, Mr.Weighs Willum- changeSaid Options David Commission Munns, isvice investigating chairman lydorsed become a line a of headache iPods. of sorts for methodrounded for by valuing Silicon Valleyasset manage- venture partiesing stent to dismiss business various in the claims third company’sHeworked did, withchief however, in financial 1995 dismiss to getofficer. into all the flictsingquarter. inherent stent Boston business in full Scientific service in the invest- third filed tion,”racketeeringHeThe Mr. did, existing Weil however, said and networks then. other dismiss claims have all at- pinnedpeopledeal brokered inthe the acquisition music by its industry record of Smith label,involved Bar- en- Frontieritseastern 12,000 Foundation,thousand University brokers, referring dropout the toorigi- sur-the dealandthe rounds brokered its portfolio of the by majorits of record business, labels label, to talk likeen- eastern University dropout sur- products in ways that would allow changes over the next few years.” stadNapster is taking tried a closeto filter look out at some the asset un- ofwhether the music the asset giant management EMI Group, busi- “It’s Mr.The Prince. industry’s The turnabout Securities with and Ex-Mr. mentcapitalists franchises in the isdot-com to take boom. 2 percent Sno- quarter. Boston Scientific filed racketeeringstent business. and other claims mentquarter.counterclaims banks managing Boston charging Scientific a mutual filedfund that racketeeringtractedagainstHaving the millions presided last and two of otheroverindividual fans the hungry claims sale de- for of neyindorsed the in talks.1987, a line may of iPods. no longer hold. Recordingnalrounded cross-selling by Industry Silicon premise Valley Association that venture under- of dorsedcreditup his newesta cards, line of creation iPods. investment in the banking middle rounded by Silicon Valley venture Medinol to claim royalties on Bos- Senior Citigroup executives ac- authorizedOfmanagement Asset songs business. using Management He an now acoustic runs neverness, ontoo Mr.late Jones’to go Unit straight.” watch, received changeFanning Commission is not much is investigating different. ofcap assets has beenunder receiving management, advice which from counterclaims charging that againstJudge the last Alvin two K. individual Hellerstein de- of businesscounterclaimsMedinol are was“going responsible to charging produce for some that the againsttruckfreefendants music leasing the in last and the business, two case: movies, individual Mr. Peter and Willum- de- M. their LastButThe industry’s even week’s if licensed sale turnabout of file-sharing Citigroup’s with Mr. America.pinnedcapitalistsCOMPANY the Mr. inacquisition the NAMES Von dot-com Lohmann of Smithboom. repre- Bar-Sno- andof The last brokerage industry’s year, he service, turnabout was greeted make with it with Mr. the capitalists in the dot-com boom. Sno- knowledge that the asset manage- the division in his capacity as the inappropriate payments from a whetherMonths afterthe asset Napster management Inc., which busi- he inHilary this caseRosen, would the longtime attach a chief value ex- to Medinol was responsible for the fendantsFederal in District the case: Court Peter in Manhat- M. tonOfMedinolbreakdown Scientific’s Asset was in responsiblethe stents relationship. Management or other for the fendantsstadparentNicholas, is takingcompanies in Boston the a close case:Unit havelook Scientific’s Peter at generated the M.asset OftruckfailsFanning commercially, leasingAsset is not unit, much musicanotherManagement different. execu- such sentsneycap in has 1987, StreamCast been may receiving noUnit longer Networks, advice hold. from the Fanningmostskepticism diverse is in of not financial some much quarters. institutions. different. But cap has been receiving advice from changes over the next few years.” ment business, which through the head of Citigroup’s global invest- third-partyand commercial trust bank.insurance products. ness,helped on found, Mr. Jones’ emerged watch, in 1999, received the theecutive unit of $10the billion.R.I.A.A. who is a politi- breakdown in the relationship. Nicholas,tan issued Boston an 84-page Scientific’s ruling yes- monetarybreakdownJudge damages. Hellerstein’s in the relationship. ruling dealt Nicholas,managementrevenuechairman by and showering Boston business. former Scientific’susers chiefHe now exec-with runs ad- “manufacturingtivesMonthsContinued are after privately From Napster First business,’’ delighting BusinessInc., which to in Page Gen- thehe companyHilaryLast Rosen, week’s that the salereleases longtime of Citigroup’s Morpheus chief ex- MonthsseveralAll the after executivessame, Napster the trend said Inc., toward the which lasting dis- he Hilary Rosen, the longtime chief ex- Senior Citigroup executives ac- firstand commercialnine months insuranceof this year products. contrib- mentCOMPANY management NAMES division. and“ThereAs commercial for has the been unit’s ainsurance move performance, in profitabil-products. it inappropriatemajor labels sued payments it for copyright from in- a calBankers commentator say, however,and strategist. that the chairmanterday thatand narrowedformer chief the scopeexec- of Hewith also a ruledrange that of motions a manufac- by the chairmanthevertisements.utive, division and and Lawrence in former Snocaphis capacity C.chief Best, executives, exec- as the the eralpublic-relationshelped Electric found, for emerged $4.4 value billion, ofin 1999, workingwas the software.truckecutive leasingof the “If R.I.A.A. you unit, care who another about is a politi- copy- such helpedtributionpower of found, Mr. is becoming Fanning’s emerged more original in 1999, evident. file- the ecutive of the R.I.A.A. who is a politi- Judge Hellerstein’s ruling dealt knowledgeContinuedJudge From Hellerstein’s that First the asset Business ruling manage- dealtPage uted“There a merehas been 2.2 percenta move into profitabil- the com- ContinuedMr. Willumstad From First assumed Business that Page po- “Therehasity from been has manufacturing lessbeen thana move extraordinary, in to profitabil- distribu- third-partyfringement. trust bank. businessSaid David is unlikelyMunns, vice to commandchairman utive,the and dispute Lawrence and he C. scheduled Best, the a turingparties line to that dismiss Boston various Scientific claims utive,headwhocompany’s declined ofand Citigroup’s Lawrence chief to comment financial C. global Best, officer.for this invest- the ar- mostwithmajor their recentlabels onetime sued manifestation legalit for nemesis.copyright of such in- right,”“manufacturingcal commentator he added, business,’’and “why strategist. would to Gen- you majorsharing labels concepts sued it for intrigued copyright them in- cal commentator and strategist. with a range of motions by the mentwith business, a range which of motions through by the pany’sity from overall manufacturing profits, is to not distribu- a core flictssition inherent in October in full after service Thomas invest- W. itywithtion,” from Smith Mr. manufacturing Weil Barney said mutualthen. to funds distribu- pro- It AsNapster started for the tried in unit’s 2002, to filter when performance, out Mr. some Weill un- it suchof the a musicprice given giant the EMI possibility Group, “It’sthat meeting in January to set the date secretly built in Ireland to make mentticle, management argue that the division. network opera- thinking.fringement.“We sort of liked the irony of the wanteralSaid Electric to David drive forMunns, people $4.4 billion,vice to morechairman was off-the fringement.enough to listen to his latest idea. Said David Munns, vice chairman parties to dismiss various claims company’s chief financial officer. firstflictsparties nine inherent months to dismiss in of full this various service year contrib- claims invest- company’sbusiness.tion,” Mr. Weil Theychief said financial say then. that officer. managing flictsmentJones inherentbankswas fired managing in by full Mr. service aPrince mutual invest-for fund his tion,”ducingHaving Mr. a cumulative Weil presided said then. overfive-year the salereturn of spunhasauthorized been off Travelers less songs than using property extraordinary, an acoustic casual- billionsnever too might late toflow go straight.”out of the unit in for a trial that he said should be- the Medinol-designed stents vio- torsMr. are, Willumstad in the end, assumed entrepreneurs that po- wholeTheNapster thing,” comments tried said to offilterone Robert executive, out some B. Wil- un- re- shore,mostof the recentmusic encrypted, giant manifestation anonymousEMI Group, of kinds such “It’s Napster“This istried a world to filter of out very some short un- of the music giant EMI Group, “It’s utedment a banks mere managing2.2 percent a mutualto the com- fund moneyHaving for presided investors over is in the essence sale of a mentbusinessrole inbanks the are scandalmanaging “going to over aproduce mutual Citigroup’s somefund oftruck Having 1.86 leasing percent, presided business, according over Mr. the to Willum- sale Morn- of ty,with the Smith bank’s Barney provider mutual of home, funds autopro- the aftermath of any such deal. lated the terms of their agree- sitionwho will in be October persuaded after that Thomas changing W. lumstad,callingauthorized an Citigroup’s earlysongs meeting using chief an operating with acoustic Mr. ofthinking.never networks? too late That’s to go straight.” all this would ac- authorizedmemories,” songs one using music an executive acoustic never too late to go straight.” gin promptly. pany’sbusiness overall are “going profits, to produce is not a some core manufacturingtruck leasing business, business Mr. embedded Willum- businesschangesprivate bankoverare “going the being next to barred fewproduce years.” from some op- truckingstar.stad is leasing taking Such a business, a close figure look ranks Mr. at the Willum- behind asset ducing a cumulative five-year return ment, leaving it to Medinol to Jonesto a Snocap-driven was fired by Mr.business Prince is for a wis- his officerFanning, and who a longtime declined disciple to comment of Mr. complish.”The comments of Robert B. Wil- said. “If you held grudges you would- Medinol’s lawsuit, filed in April business.changes over They the say next that few years.” managing instad an is institution taking a close that lookhas historicallyat the asset changeseratingSenior in over Japan. Citigroup the next executivesfew years.” ac- stadinvestmentmanagement is taking banks abusiness. close like look Merrill He at nowthe Lynch asset runs of 1.86 percent, according to Morn- prove damages from the action at roleer path in theto profit. scandal over Citigroup’s Weill,for this arearticle. instructive as well. He lumstad,There is Citigroup’s no dearth chiefof examples operating of n’tCOMPANY last two minutes NAMES in this industry.” of 2001, is seeking royalties of up moneySenior for Citigroup investors is executives in essence ac- a mademanagement its money business. via distribution. He now runsAnd knowledgeSeniorWhile Citigroup’s Citigroup that the executives asset mutual manage- funds ac- managementandthe Morgan division Stanley. inbusiness. his capacity He now as runs the ingstar. Such a figure ranks behind a trial. privateFor the bank moment, being barred however, from there op- statedCOMPANYPerhaps at the more time NAMES important, that the salethe roll- was howofficer technological and a longtime shifts disciple have left of Mr.the COMPANYMr. Fanning NAMES “was popularly to 23 percent on every Express manufacturing business embedded now,the division given that in his only capacity 25 percent as the of menthave not business, been the which target throughof any regu- the theheadDespite division of Citigroup’sthese in hisissues, capacity global analysts asinvest- say the investment banks like Merrill Lynch knowledge that the asset manage- eratingappears in little Japan. chance that the most knowledgedrivenout of Snocap by the that bank’smay the figure asset drive in manage- to the “allo- in- recordingWeill, are industry instructive unsure as ofwell. where He thought of as a dragon slayer, when and Taxus stent Boston Scientific in Bostonan institution Scientific that said has that historically its li- head of Citigroup’s global invest- firstlatory nine action, months the ofdivision this year has contrib- recent- headthatment the management of business Citigroup’s could division. global draw invest-signifi- and Morgan Stanley. ment business, which through the popularSmithWhile Barney file-sharing Citigroup’s funds are networks,mutual sold through funds like mentcatedustry’s business, capital bid to reversewhich most through a effectively series the of tostated turn. at In the1998, time the thatmajor the music sale wascor- in reality that wasn’t his intention” has sold. Taxus quickly became madeability, its if money any, would via distribution. be minimal And ment management division. utedly become a mere a 2.2 headache percent ofto sortsthe com- for mentcantMr. management investor Willumstad interest. division. assumed Asset that man- po- Despite these issues, analysts say first nine months of this year contrib- haveKazaa,its 12,000 not willbeen thousand embrace the target brokers, the of any software,the regu-origi- firstthroughoutlosses nine in months court, our where of businesses.” this theyear major contrib- Citi- la- porationsdriven by suedthe bank’s (unsuccessfully) drive to “allo- to with Napster, said Larry Kenswil, the market leader once it was now,because given no that stents only from 25 thatpercent se- of Mr. Willumstad assumed that po- pany’sMr. Prince. overall The profits, Securities is not and a core Ex- agementsitionMr. Willumstad in October businesses assumedafter now Thomas trade that po- W. at that the business could draw signifi- uted a mere 2.2 percent to the com- latorywhichnal cross-selling action,means thethe premise divisionindustry hasthat may recent- under- have utedgroupbels a have executivesmere been 2.2 percent seeking also said to verdicts the that com- the to blockcate the capital release mostof Diamond effectively Multi- president of Universal Music’s cleared for use in the United Smithcret line Barney were funds ever are sold, sold a claimthrough sition in October after Thomas W. business.change Commission They say isthat investigating managing sitionpriceJones towas in earnings October fired by multiplesafterMr. Prince Thomas that for ap-his W. cant investor interest. Asset man- pany’s overall profits, is not a core lytopinned become rely the on anacquisition a headache upstart of network of Smith sorts Bar- with for pany’sdivisionhold the overall did companiesnot profits,offer cross-selling is behind not a core theop- media’sthroughout portable our MP3 businesses.” player, saying Citi- eLabs division. “He’s taken that ex- States this year. Stents are metal itsMedinol 12,000 disputed. thousand brokers, the origi- Jones was fired by Mr. Prince for his moneywhether for the investors asset management is in essence busi- a Jonesproachrole in was the or fired even scandal by exceed Mr. over Prince 20 Citigroup’s times, for his a agement businesses now trade at business. They say that managing Mr.fewney in Prince. customers. 1987, may The no One Securities longer network hold. and in Ex- de- business.portunities.Grokster and They Morpheus say that networks managing li- itgroup “promotes executives the illicit also use” said of that digital the perience, taken a step back and mesh cylinders that prop open nalJudge cross-selling Hellerstein premise also that refused under- role in the scandal over Citigroup’s manufacturingness, on Mr. Jones’ business watch, embedded received rolevaluationprivate in the bank thatscandal being far over barred exceeds Citigroup’s from Citi- op- price to earnings multiples that ap- money for investors is in essence a changeLast Commission week’s sale is of investigating Citigroup’s money for investors is in essence a musicdivision files. did not offer cross-selling op- thought of a way that everyone can pinnedto dismiss the withoutacquisition trial of a Smithnumber Bar- private bank being barred from op- ininappropriate Toan beinstitution sure, a sale paymentsthat of has the historicallyasset from man- a privategroup’serating in bank own Japan. beingdepressed barred price from earn- op- proach or even exceed 20 times, a blood vessels. manufacturing business embedded whethertruck leasing the asset unit, management another busi- such manufacturing business embedded Six years later, the industry is benefit.” ney in 1987, may no longer hold. erating in Japan. agementthird-party unit trust would bank. not represent eratingingsportunities.While ratio in Citigroup’sJapan. of just under mutual 12 times funds its valuation that far exceeds Citi- Boston Scientific, based in Na- ofin an Medinol’s institution potential that has defenseshistorically ness,“manufacturing on Mr. Jones’ business,’’ watch, received to Gen- inmade an institution its money thatvia distribution. has historically And gleefully promoting Apple Comput- Mr. Fanning also had the advan- Last week’s sale of Citigroup’s While Citigroup’s mutual funds theAs beginning for the unit’s of the performance, unbundling of it earnings.haveWhileTo benot sure, been Citigroup’s a the sale target of mutualthe of asset any fundsregu-man- group’s own depressed price earn- tick, Mass., reported $686 million againstmade its various money via Boston distribution. Scientific And inappropriateeral Electric for payments $4.4 billion, from was the a madenow, givenits money that via only distribution. 25 percent And of er’s iPods, even placing them in mu- tage of coming in with better connec- truck leasing unit, another such have not been the target of any regu- Citigroup.has been Theless company than extraordinary, remains a haveagementlatoryA general, not action, been unit ifthe the wouldnot divisiontarget always not of has any representaccurate, recent- regu- ings ratio of just under 12 times its in revenue from its rapidly grow- counterclaims.now, given that only 25 percent of third-partymost recent trust manifestation bank. of such now,Smith given Barney that funds only are 25 sold percent through of sic videos. The rock band U2, in a tions than the ones he had as a North- “manufacturing business,’’ to Gen- Citigrouplatory action, the division Weighs has recent- dominantwith SmithOptions globalBarney banking mutual funds franchise pro- latorymethodthely become beginning action, for avaluing the headache of division the asset unbundling ofhas sortsmanage- recent- for of earnings. ing stent business in the third SmithHe did,Barney however, funds are dismiss sold through all thinking.As for the unit’s performance, it Smithits 12,000 Barney thousand funds brokers, are sold the through origi- deal brokered by its record label, en- eastern University dropout sur- eral Electric for $4.4 billion, was the ly become a headache of sorts for andducing its a cumulative portfolio of five-year business, return like lymentCitigroup.Mr. become Prince. franchises The a The headache company is Securities to take of remains 2 sorts andpercent Ex- for a A general, if not always accurate, quarter. Boston Scientific filed racketeeringits 12,000 thousand and brokers, other claims the origi- hasThe been comments less than of Robertextraordinary, B. Wil- itsnal 12,000 cross-selling thousand premise brokers, that the under- origi- dorsed a line of iPods. rounded by Silicon Valley venture most recent manifestation of such Mr. Prince. The Securities and Ex- creditof 1.86 cards,percent, investment according to banking Morn- Mr.ofdominantchange assets Prince. Commission under global The management, Securities banking is investigating franchise and which Ex- method for valuing asset manage- counterclaims charging that againstnal cross-selling the last two premise individual that under-de- withlumstad, Smith Citigroup’s Barney mutual chief funds operating pro- nalpinned cross-selling the acquisition premise of thatSmith under- Bar- The industry’s turnabout with Mr. capitalists in the dot-com boom. Sno- thinking. change Commission is investigating andingstar. brokerage Such a service, figure ranks make behind it the changeinandwhether this its case Commission the portfolio asset would management ofattach is business, investigating a value busi- like to ment franchises is to take 2 percent Medinol was responsible for the fendantspinned the in acquisition the case: of Peter Smith M. Bar- ducingOfofficer aandAsset cumulative a longtime five-year discipleManagement return of Mr. pinnedney in 1987,the acquisition may noUnit longer of Smith hold. Bar- Fanning is not much different. cap has been receiving advice from The comments of Robert B. Wil- whether the asset management busi- mostinvestment diverse banks of financial like Merrill institutions. Lynch whetherthecreditness, unit on cards,ofthe Mr. $10 asset Jones’billion. investment management watch, received banking busi- of assets under management, which breakdown in the relationship. Nicholas,ney in 1987, may Boston no longer Scientific’s hold. ofWeill, 1.86 arepercent, instructive according as to well. Morn- He neyLast in 1987, week’s may no sale longer of Citigroup’shold. Months after Napster Inc., which he Hilary Rosen, the longtime chief ex- ness, on Mr. Jones’ watch, received andAll Morgancommercial the same, Stanley. the insurance trend toward products. dis- ness,andinappropriateBankers brokerage on Mr. say, Jones’ service, payments however, watch, make receivedthat from it the a in this case would attach a value to lumstad,chairmanLast week’s Citigroup’s and former sale chief ofchief Citigroup’s operating exec- ingstar.stated at Such the time a figure that ranks the sale behind was truckLast leasing week’s unit,sale of another Citigroup’s such helped found, emerged in 1999, the ecutive of the R.I.A.A. who is a politi- Judge Hellerstein’s ruling dealt inappropriateContinued From paymentsFirst Business from Page a tribution“ThereDespite has is these been becoming aissues, move more analystsin profitabil- evident. say inappropriatebusinessmostthird-party diverse is trust of unlikely financial payments bank. to institutions. command from a the unit of $10 billion. officertruck and leasing a longtime unit, disciple another of suchMr. investmentdriven by thebanks bank’s like Merrill drive to Lynch “allo- truck“manufacturing leasing unit, business,’’ another to such Gen- major labels sued it for copyright in- cal commentator and strategist. with a range of motions by the utive, and Lawrence C. Best, the third-party trust bank. Ititythat started from the business manufacturing in 2002, could when draw to Mr. distribu- signifi- Weill third-partysuchAllAs athe for price same, the trust given unit’s the bank. the trend performance, possibility toward that dis- it Bankers say, however, that the Weill,“manufacturing are instructive business,’’ as well. to Gen- He andcate Morgan capital Stanley. most effectively “manufacturingeral Electric for business,’’$4.4 billion, towas Gen- the fringement. Said David Munns, vice chairman parties to dismiss various claims company’s chief financial officer. flictsAs inherentfor the unit’s in full performance, service invest- it spuntion,”cant off investorMr. Travelers Weil said interest. then. property Asset casual- man- billionstributionhasAs been for might theisless becoming unit’sflow than out performance, extraordinary, moreof the evident. unit in it business is unlikely to command statederal Electric at the timefor $4.4 that billion, the sale was was the throughoutDespite these our issues, businesses.” analysts Citi-say eralmost Electric recent for manifestation $4.4 billion, was of such the Napster tried to filter out some un- of the music giant EMI Group, “It’s menthas beenbanks less managing than extraordinary,a mutual fund ty,agementHaving the bank’s businessespresided provider over now of thehome, trade sale auto atof hastheItwith started aftermath beenSmith lessBarney in of 2002,than any mutual whensuch extraordinary, deal. funds Mr. Weill pro- such a price given the possibility that drivenmost recent by the manifestation bank’s drive to of “allo- such thatgroup the executives business could also saiddrawthat signifi- the mostthinking. recent manifestation of such authorized songs using an acoustic never too late to go straight.” businesswith Smith are Barney “going mutual to produce funds some pro- truckprice to leasing earnings business, multiples Mr. thatWillum- ap- withspunducing Smith off a cumulative Travelers Barney mutual property five-year funds casual- return pro- billions might flow out of the unit in catethinking. capital most effectively cantdivision investor did not interest.offer cross-selling Asset man- op- thinking.The comments of Robert B. Wil- changesducing a overcumulative the next five-year few years.” return stadproach is taking or even a close exceed look 20at the times, asset a ducingty,of 1.86the bank’sa percent, cumulative provider according five-year of home, to return Morn- auto the aftermath of any such deal. throughoutThe comments our businesses.” of Robert B. Citi- Wil- agementportunities. businesses now trade at lumstad,The comments Citigroup’s of Robert chief operating B. Wil- of 1.86 percent, according to Morn- managementvaluation that business. far exceeds He now runs Citi- ofingstar. 1.86 percent, Such a accordingfigure ranks to behind Morn- grouplumstad, executives Citigroup’s also chief said operating that the priceSeniorTo be to sure, earnings Citigroup a sale multiples of executives the asset that man- ap- ac- lumstad,officer and Citigroup’s a longtime chief disciple operating of Mr. COMPANY NAMES ingstar. Such a figure ranks behind thegroup’s division own in depressed his capacity price as earn- the ingstar.investment Such banks a figure like Merrill ranks behind Lynch division did not offer cross-selling op- proachknowledgeagement or unit even that would exceed the asset not 20 represent manage-times, a officerWeill, and are a instructive longtime disciple as well. of Mr. He officer and a longtime disciple of Mr. investment banks like Merrill Lynch headings ratio of Citigroup’s of just under global 12 times invest- its investmentand Morgan banks Stanley. like Merrill Lynch portunities. valuationmentthe beginning business, that of which far the exceeds unbundling through Citi-the of Weill,stated are at the instructive time that asthe well. sale was He Weill, are instructive as well. He and Morgan Stanley. mentearnings. management division. andDespite Morgan these Stanley. issues, analysts say To be sure, a sale of the asset man- group’sfirst nine own months depressed of this year price contrib- earn- driven by the bank’s drive to “allo- stated at the time that the sale was Citigroup.Despite these The companyissues, analysts remains say a statedMr.A general, Willumstadat the timeif not thatassumedalways the accurate, sale that was po- thatDespite the business these issues, could analystsdraw signifi- say agement unit would not represent ingsuted ratioa mere of just2.2 percent under 12to timesthe com- its cate capital most effectively driven by the bank’s drive to “allo- dominantthat the business global could banking draw franchise signifi- drivensitionmethod in by for October the valuing bank’s after asset drive Thomas manage-to “allo- W. thatcant the investor business interest. could draw Asset signifi- man- the beginning of the unbundling of earnings.pany’s overall profits, is not a core throughout our businesses.” Citi- cate capital most effectively andcant its investor portfolio interest. of business, Asset man- like cateJonesment franchiseswas capital fired by is most Mr.to take Prince effectively 2 percent for his cantagement investor businesses interest. now Asset trade man- at Citigroup. The company remains a business.A general, They if not say always that managingaccurate, group executives also said that the throughout our businesses.” Citi- creditagement cards, businesses investment now trade banking at throughoutroleof assets in the under scandal our management, businesses.” over Citigroup’s which Citi- agementprice to earnings businesses multiples now trade that ap- at dominant global banking franchise methodmoney for for investors valuing assetis in essence manage- a division did not offer cross-selling op- group executives also said that the andprice brokerage to earnings service, multiples make that it theap- groupprivatein this executives case bank would being also attach barred said a from that value the op- to priceproach to or earnings even exceed multiples 20 times,that ap- a and its portfolio of business, like mentmanufacturing franchises businessis to take embedded2 percent portunities. division did not offer cross-selling op- mostproach diverse or even of financial exceed institutions. 20 times, a divisioneratingthe unit indidof Japan.$10 not billion. offer cross-selling op- proachvaluation or even that exceed far exceeds 20 times, Citi- a credit cards, investment banking ofin assetsan institution under management,that has historically which portunities. valuationAll the same, that the far trend exceeds toward Citi- dis- portunities.WhileToBankers be sure, Citigroup’s say, a sale however, of the mutual asset that fundsman- the valuationgroup’s own that depressed far exceeds price earn- Citi- and brokerage service, make it the inmade this its case money would via attach distribution. a value And to To be sure, a sale of the asset man- tributiongroup’s own is becoming depressed more price evident. earn- haveagementbusinessTo benot sure, been unitis a unlikely the sale would target of the not to of asset command representany man-regu- group’sings ratio own of justdepressed under 12price times earn- its most diverse of financial institutions. thenow, unit given of $10 that billion. only 25 percent of agement unit would not represent Itings started ratio of in just 2002, under when 12 Mr. times Weill its agementlatorythesuch beginning a action,price unit given the would of division the possibility not unbundling has represent recent- that of ingsearnings. ratio of just under 12 times its All the same, the trend toward dis- SmithBankers Barney say, funds however, are sold that through the the beginning of the unbundling of spunearnings. off Travelers property casual- thelyCitigroup.billions become beginning might The a headacheflow of company the out unbundling of of remainsthe sorts unit for ofin a earnings.A general, if not always accurate, tribution is becoming more evident. businessits 12,000 thousand is unlikely brokers, to command the origi- Citigroup. The company remains a ty,A the general, bank’s ifprovider not always of home, accurate, auto Citigroup.Mr.dominantthe aftermath Prince. Theglobal The of company any Securities banking such remainsdeal. franchise and Ex- a methodA general, for valuingif not always asset accurate, manage- It started in 2002, when Mr. Weill suchnal cross-selling a price given premise the possibility that under- that dominant global banking franchise method for valuing asset manage- dominantchangeand its Commission portfolio global banking of is business, investigating franchise like methodment franchises for valuing is to assettake 2 manage- percent spunand itsoff Travelers portfolio of property business, casual- like billionspinned themight acquisition flow out ofof Smiththe unit Bar- in andcredit its cards, portfolio investment of business, banking like of assets under management, which neyment in franchises1987, may no is longerto take hold. 2 percent whether the asset management busi- ment franchises is to take 2 percent ty,credit the bank’s cards, provider investment of home, banking auto the aftermath of any such deal. creditand brokerage cards, investment service, make banking it the ofin assets this case under would management, attach a value which to of Lastassets week’s under management, sale of Citigroup’s which ness, on Mr. Jones’ watch, received and brokerage service, make it the in this case would attach a value to andmost brokerage diverse of service,financial makeinstitutions. it the inthe this unit case of $10 would billion. attach a value to truck leasing unit, another such inappropriate payments from a most diverse of financial institutions. the unit of $10 billion. mostAll diversethe same, of financialthe trend institutions. toward dis- theBankers unit of $10 say, billion. however, that the “manufacturing business,’’ to Gen- third-party trust bank. All the same, the trend toward dis- Bankers say, however, that the tributionAllAs the for same, isthe becoming unit’s the trend performance, more toward evident. dis- it businessBankers is say, unlikely however, to command that the eral Electric for $4.4 billion, was the tribution is becoming more evident. business is unlikely to command tributionhasIt started been is less in becoming 2002, than when extraordinary, more Mr. evident. Weill businesssuch a price is given unlikely the possibility to command that most recent manifestation of such It started in 2002, when Mr. Weill such a price given the possibility that Itwithspun started Smith off Travelers inBarney 2002, mutual propertywhen Mr.funds casual- Weill pro- suchbillions a price might given flow the out possibility of the unit that in thinking. spun off Travelers property casual- billions might flow out of the unit in spunducingty, the off bank’sa Travelerscumulative provider property five-year of home, casual- return auto billionsthe aftermath might offlow any out such of deal.the unit in The comments of Robert B. Wil- ty, the bank’s provider of home, auto the aftermath of any such deal. ty,of the 1.86 bank’s percent, provider according of home, to Morn- auto the aftermath of any such deal. lumstad, Citigroup’s chief operating ingstar. Such a figure ranks behind officer and a longtime disciple of Mr. investment banks like Merrill Lynch Weill, are instructive as well. He and Morgan Stanley. stated at the time that the sale was Despite these issues, analysts say driven by the bank’s drive to “allo- that the business could draw signifi- cate capital most effectively cant investor interest. Asset man- throughout our businesses.” Citi- agement businesses now trade at group executives also said that the price to earnings multiples that ap- division did not offer cross-selling op- proach or even exceed 20 times, a portunities. valuation that far exceeds Citi- To be sure, a sale of the asset man- group’s own depressed price earn- agement unit would not represent ings ratio of just under 12 times its the beginning of the unbundling of earnings. Citigroup. The company remains a A general, if not always accurate, dominant global banking franchise method for valuing asset manage- and its portfolio of business, like ment franchises is to take 2 percent credit cards, investment banking of assets under management, which and brokerage service, make it the in this case would attach a value to most diverse of financial institutions. the unit of $10 billion. All the same, the trend toward dis- Bankers say, however, that the tribution is becoming more evident. business is unlikely to command It started in 2002, when Mr. Weill such a price given the possibility that spun off Travelers property casual- billions might flow out of the unit in ty, the bank’s provider of home, auto the aftermath of any such deal. ID NAME: Nxxx,2004-12-03,C,002,Bs-BW,E2 3 7 15 25 50 75 85 93 97

I.B.M. Said to Put Computer Unit on the Market in 2002. He has sold hardware busi- Continued From Page A1 to get out of that business as it made nesses where profits were slender only a modest profit or lost money. and growth prospects were limited, PC Shipments the production of desktop machines, For this year, analysts have expect- like its hard disk drive business, Includes desktops, it has been widely criticized for hav- ed a pretax profit of less than $100 which was sold to Hitachi. notebooks and servers. ing destined the machines to com- million. Instead, Mr. Palmisano has bet on modity status by giving Microsoft I.B.M. executives long resisted expanding the company’s services UNITED 1,000’s and Intel the rights to those essential that course, arguing that personal business, automating a full array of STATES UNIT MARKET standards. And although Apple Com- computers were technology products operations — from product design to Q3, ’04 SALES SHARE puter holds less than 4 percent of the its corporate customers wanted. It sales-order processing — for corpo- personal computing market world- held on to the business on the theory rate customers. I.B.M. now casts it- Dell 5,023 32.8% wide, it has been able to command that it helped hold on to customers. self as a company that does not sim- H.P. 3,133 20.5 relatively high prices and richer But in the most recent quarter, ply sell technology but serves as a Gateway 800 5.2 profits because it has controlled the consulting partner to help its cus- I.B.M. ranked a distant third in I.B.M. 797 5.2 software and hardware that goes worldwide PC sales, with 5.6 percent tomers use technology to increase into its machines. of the market, according to Gartner, the efficiency and competitiveness of Toshiba 561 3.7 A sale of the personal computer the market research firm. Dell was their businesses. As part of that Apple 510 3.3 business would be a step away from the leader with 16.8 percent of the strategy, he bought Pricewater- Sony 295 1.9 I.B.M.’s traditional emphasis on the world market, and Hewlett-Packard, houseCoopers Consulting for $3.5 bil- size of its revenue as a measure of its which has absorbed Compaq Com- lion, in a deal that closed in October WORLDWIDE corporate power. The PC business puter, had 15 percent. 2002. Dell 8,050 18.0% represents about 12 percent of “Palmisano’s getting out of busi- A sale now, if it happens, would be H.P. 7,176 16.1 I.B.M.’s annual revenue of $92 billion. consistent with the strategy pursued nesses that aren’t growth opportuni- For nearly a decade, though, some by Samuel J. Palmisano, who be- ties and concentrating on what I.B.M. 2,696 6.0 industry analysts have urged I.B.M. came I.B.M.’s chief executive early I.B.M. does best,’’ said Mark Stahl- Fujitsu 1,735 3.9 man, an analyst at Carris & Compa- Acer 1,620 3.6 ny. “PC’s are not where the growth Toshiba 1,619 3.6 is.” To trim costs, I.B.M. has steadily NEC 1,221 2.7 retreated from the manufacture of its PC’s. In January 2002, it sold its Source: IDC WW Quarterly PC Tracker desktop PC manufacturing opera- tions in the Untied States and Europe to Sanmina-SCI, based in San Jose, Hewlett-Packard, a broad-based Calif. I.B.M. now confines its role in technology company where PC’s are PC’s to design and product develop- only part of a much larger business, I.B.M. ment out of its offices in Raleigh, might face pressures similar to An I.B.M. ad campaign that ended in 1987 — seen then as an effort to N.C., with all the I.B.M.-brand desk- I.B.M.’s. soften the company’s image — featured a Charlie Chaplin look-alike. top or notebook computers made by “The PC divisions of H. P. and contract manufacturers around the I.B.M.” Ms. Fiering wrote, “are vul- world. nerable to being spun off if their drag Asia has increasingly become a prominent rival in chip making, has Leslie Fiering, a research vice on margins and profitability are major hub for technology manufac- a leading-edge plant in Germany. president at Gartner, has predicted deemed too great by their parent turing. More and more chip making Personal computer making has consolidation in the PC industry over companies.” is done in the contract factories, like followed the same path to Asia, espe- the next few years. In the meantime, she said, Asian Taiwan Semiconductor, and at new cially in the case of notebook ma- “Exiting the market may be the vendors like Lenovo “appear well po- foundries in China. chines made in China and Taiwan. only logical choice for global vendors sitioned to leverage their strong lo- Still, in the semiconductor indus- Lenovo has had long ties with I.B.M. Mike Mergen/Bloomberg News bleeding profits and struggling for cal-market standing and low-cost op- try, Intel and I.B.M. still have big fac- It got its start in 1984 as a distributor A sale of the unit, should it materialize, is expected to include the entire share,” she wrote in a recent re- erating models into a global pres- tories in the United States, and Ad- of personal computers from I.B.M. range of desktop, laptop and notebook computers made by I.B.M. search report. And she noted that ence.” vanced Micro Devices, Intel’s most and AST, the Taiwan PC maker. Judge Narrows Scope of Suit Music Industry Turns to Creator of Napster for Assistance Over Boston Scientific Stents able for copyright violations. “fingerprinting” technology not un- Continued From First Business Page The networks have long argued — like the sort that Snocap relies on — without a trial. He dismissed A software program and a federal appeals court has a technique that tracks the sonic By BARNABY J. FEDER Medinol’s claim that Boston Sci- way to attract paying music fans. agreed — that they cannot monitor characteristics of music files. entific stole its design and trade “If what they’re looking for is free, that can help detect their users. But the music companies But a judge’s ruling forced the net- then they’re not likely to partici- may argue that Snocap proves that it work out of service in mid-2001. Mr. Time is running out for Boston secrets to create the Express pirated music files. stent line, which later became the pate,” said Josh Bernoff, an analyst is possible to track and block the Fanning became a consultant for Scientific to resolve voluntarily transmission of unauthorized con- Roxio, which bought Napster’s fa- basis for Taxus. with Forrester Research. “There’s what could be a multibillion-dol- going to have to be some sort of tent. mous name at a bankruptcy auction But he said that Medinol could lar liability resulting from the uniqueness to a system like this that velopment, Mashboxx, has been in “I just view this as an exercise in and transformed it into a subscrip- try to prove at a trial that Boston breakdown of its relationship with goes beyond it being a peer-to-peer discussions to plug Snocap’s soft- R.I.A.A. propaganda,” said Fred Von tion music service. Scientific violated contractual ob- Medinol, the Israeli company it system.” ware into its system, according to Lohmann, a lawyer at the Electronic When Mr. Fanning began making worked with in 1995 to get into the ligations to work with it on future The existing networks have at- people in the music industry involved Frontier Foundation, referring to the the rounds of the major labels to talk stent business. products in ways that would allow tracted millions of fans hungry for in the talks. Recording Industry Association of up his newest creation in the middle Judge Alvin K. Hellerstein of Medinol to claim royalties on Bos- free music and movies, and their But even if licensed file-sharing America. Mr. Von Lohmann repre- of last year, he was greeted with Federal District Court in Manhat- ton Scientific’s stents or other parent companies have generated fails commercially, music execu- sents StreamCast Networks, the skepticism in some quarters. But tan issued an 84-page ruling yes- monetary damages. revenue by showering users with ad- tives are privately delighting in the company that releases Morpheus several executives said the lasting terday that narrowed the scope of He also ruled that a manufac- vertisements. Snocap executives, public-relations value of working software. “If you care about copy- power of Mr. Fanning’s original file- 3 the dispute and he scheduled a turing line that Boston Scientific who declined to comment for this ar- with their onetime legal nemesis. right,” he added, “why would you sharing concepts intrigued them meeting in January to set the date secretly built in Ireland to make ticle, argue that the network opera- “We sort of liked the irony of the want to drive people to more off- enough to listen to his latest idea. for a trial that he said should be- the Medinol-designed stents vio- tors are, in the end, entrepreneurs whole thing,” said one executive, re- shore, encrypted, anonymous kinds “This is a world of very short gin promptly. lated the terms of their agree- who will be persuaded that changing calling an early meeting with Mr. of networks? That’s all this would ac- memories,” one music executive Medinol’s lawsuit, filed in April ment, leaving it to Medinol to to a Snocap-driven business is a wis- Fanning, who declined to comment complish.” said. “If you held grudges you would- er path to profit. There is no dearth of examples of n’t last two minutes in this industry.” of 2001, is seeking royalties of up prove damages from the action at for this article. For the moment, however, there how technological shifts have left the Mr. Fanning “was popularly to 23 percent on every Express a trial. Perhaps more important, the roll- appears little chance that the most recording industry unsure of where thought of as a dragon slayer, when and Taxus stent Boston Scientific Boston Scientific said that its li- out of Snocap may figure in the in- popular file-sharing networks, like dustry’s bid to reverse a series of to turn. In 1998, the major music cor- in reality that wasn’t his intention” has sold. Taxus quickly became ability, if any, would be minimal Kazaa, will embrace the software, losses in court, where the major la- porations sued (unsuccessfully) to with Napster, said Larry Kenswil, the market leader once it was because no stents from that se- which means the industry may have bels have been seeking verdicts to block the release of Diamond Multi- president of Universal Music’s cret line were ever sold, a claim cleared for use in the United to rely on an upstart network with hold the companies behind the media’s portable MP3 player, saying eLabs division. “He’s taken that ex- Medinol disputed. States this year. Stents are metal few customers. One network in de- Grokster and Morpheus networks li- it “promotes the illicit use” of digital perience, taken a step back and mesh cylinders that prop open Judge Hellerstein also refused music files. thought of a way that everyone can blood vessels. to dismiss without trial a number Six years later, the industry is benefit.” Boston Scientific, based in Na- of Medinol’s potential defenses gleefully promoting Apple Comput- Mr. Fanning also had the advan- tick, Mass., reported $686 million against various Boston Scientific er’s iPods, even placing them in mu- tage of coming in with better connec- in revenue from its rapidly grow- counterclaims. sic videos. The rock band U2, in a tions than the ones he had as a North- ing stent business in the third He did, however, dismiss all Citigroup Weighs Options deal brokered by its record label, en- eastern University dropout sur- quarter. Boston Scientific filed racketeering and other claims dorsed a line of iPods. rounded by Silicon Valley venture counterclaims charging that against the last two individual de- The industry’s turnabout with Mr. capitalists in the dot-com boom. Sno- Medinol was responsible for the fendants in the case: Peter M. Of Asset Management Unit Fanning is not much different. cap has been receiving advice from breakdown in the relationship. Nicholas, Boston Scientific’s Months after Napster Inc., which he Hilary Rosen, the longtime chief ex- and commercial insurance products. helped found, emerged in 1999, the ecutive of the R.I.A.A. who is a politi- Judge Hellerstein’s ruling dealt chairman and former chief exec- Continued From First Business Page “There has been a move in profitabil- major labels sued it for copyright in- cal commentator and strategist. with a range of motions by the utive, and Lawrence C. Best, the ity from manufacturing to distribu- fringement. Said David Munns, vice chairman parties to dismiss various claims company’s chief financial officer. flicts inherent in full service invest- tion,” Mr. Weil said then. Napster tried to filter out some un- of the music giant EMI Group, “It’s ment banks managing a mutual fund Having presided over the sale of authorized songs using an acoustic never too late to go straight.” business are “going to produce some truck leasing business, Mr. Willum- changes over the next few years.” stad is taking a close look at the asset management business. He now runs Senior Citigroup executives ac- COMPANY NAMES knowledge that the asset manage- the division in his capacity as the ment business, which through the head of Citigroup’s global invest- first nine months of this year contrib- ment management division. uted a mere 2.2 percent to the com- Mr. Willumstad assumed that po- pany’s overall profits, is not a core sition in October after Thomas W. business. They say that managing Jones was fired by Mr. Prince for his money for investors is in essence a role in the scandal over Citigroup’s manufacturing business embedded private bank being barred from op- in an institution that has historically erating in Japan. made its money via distribution. And While Citigroup’s mutual funds now, given that only 25 percent of have not been the target of any regu- Smith Barney funds are sold through latory action, the division has recent- its 12,000 thousand brokers, the origi- ly become a headache of sorts for nal cross-selling premise that under- Mr. Prince. The Securities and Ex- pinned the acquisition of Smith Bar- change Commission is investigating ney in 1987, may no longer hold. whether the asset management busi- Last week’s sale of Citigroup’s ness, on Mr. Jones’ watch, received truck leasing unit, another such inappropriate payments from a “manufacturing business,’’ to Gen- third-party trust bank. As for the unit’s performance, it eral Electric for $4.4 billion, was the has been less than extraordinary, most recent manifestation of such with Smith Barney mutual funds pro- thinking. ducing a cumulative five-year return The comments of Robert B. Wil- of 1.86 percent, according to Morn- lumstad, Citigroup’s chief operating ingstar. Such a figure ranks behind officer and a longtime disciple of Mr. investment banks like Merrill Lynch Weill, are instructive as well. He and Morgan Stanley. stated at the time that the sale was Despite these issues, analysts say driven by the bank’s drive to “allo- that the business could draw signifi- cate capital most effectively cant investor interest. Asset man- throughout our businesses.” Citi- agement businesses now trade at group executives also said that the price to earnings multiples that ap- division did not offer cross-selling op- proach or even exceed 20 times, a portunities. valuation that far exceeds Citi- To be sure, a sale of the asset man- group’s own depressed price earn- agement unit would not represent ings ratio of just under 12 times its the beginning of the unbundling of earnings. Citigroup. The company remains a A general, if not always accurate, dominant global banking franchise method for valuing asset manage- and its portfolio of business, like ment franchises is to take 2 percent credit cards, investment banking of assets under management, which and brokerage service, make it the in this case would attach a value to most diverse of financial institutions. the unit of $10 billion. All the same, the trend toward dis- Bankers say, however, that the tribution is becoming more evident. business is unlikely to command It started in 2002, when Mr. Weill such a price given the possibility that spun off Travelers property casual- billions might flow out of the unit in ty, the bank’s provider of home, auto the aftermath of any such deal. C M Y ID NAME: Nxxx,2004-12-04,C,001,Bs-BK,E2 YELO MAG CYAN 3 7 15 25 50 75 85 93 97 C M Y ID NAME: Nxxx,2004-12-04,C,001,Bs-BK,E2 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

SATURDAY, DECEMBER 4, 2004 BUSINESS An Unknown Giant Flexes Its Muscles

Amid Talk of Deal With I.B.M., Lenovo of China Sheds Some Obscurity

BUSINESS

Around the World Costs are In One Laptop estimates of what manufacturers pay Personal computers that have the for components. I.B.M. name on them are built from an international array of components. Here is a look DISPLAY SCREEN inside an I.B.M. ThinkPad X31 Two of the major selling for $2,349. screen makers are Samsung and LG ASSEMBLY Philips in Around the World Mexico. Costs are South Korea. In One Laptop estimates of what MEMORY manufacturers pay COST A 15-inch screen Personal computers that have the 10 manufacturersfor components.worldwide, is about $200; 17-inch I.B.M. name on them are built the largest in Korea. about $300. from an international array of COST 512 megabytes for about $60. GRAPHICS components. Here is a look DISPLAY SCREEN CONTROLLER CHIP inside an I.B.M. ThinkPad X31 Two of the major ATI. Made in Canada. selling for $2,349. CASE AND KEYBOARD TSMC. Made in Taiwan. Made in Thailand.screen makers are Samsung and LG COST $30 to $100. COST $50. ASSEMBLY Philips in Mexico. South Korea. MICROPROCESSOR Intel. Made in the U.S. MEMORY COST A 15-inch screen 10 manufacturers worldwide, is about $200; 17-inch COST Intel’s Centrino chip about $300. includes wireless the largest in Korea. capabilties, $275 to $500. COST 512 megabytes GRAPHICS for about $60. CONTROLLER CHIP ATI. Made in Canada. HARD DRIVE CASE AND KEYBOARD WIRELESSTSMC. CARD Made in Taiwan. Made in Thailand. Made in Thailand. Intel. Made in Malaysia. COST $30 to $100. BATTERY COST Laptop hard drives range COST $50. COST If not packaged with the Made in Asia to I.B.M. specifications. from $1.50 to $2 a gigabyte. A microprocessor, $15 to $20. COST $40 to $50 for a typical laptop battery. typical drive is about 40 gigabytes. MICROPROCESSOR Sources: IDC; Portelligent Inc.; Stanford University Intel. Made in the U.S. Photographs by Earl Wilson/The New York Times (computer) and Ricky Wong/Bloomberg News; photo illustration by The New York Times COST Intel’s Centrino chip Japan, where NEC and other Japanese companies dominate. includes wirelessBy DAVID BARBOZA (I.B.M.’s Japan unit is in the top five there, though, adding to capabilties, $275 to $500. I.B.M.’s allure for Lenovo.) SHANGHAI, Dec. 3 — Lenovo. Who? Based in Beijing and listed on the Hong Kong Stock Exchange, Although virtually unknown in the United States, Lenovo — Lenovo has made its mark by producing a line of low-cost PC’s, said to be in talks to buy I.B.M.’s personal computer business — is some selling here in China for as little as $360. With huge sales to China’s largest PC maker and the world’s fastest-growing one. Chinese government agencies and schools, and immune from the HARDAnd DRIVE it is emblematic of the ambitions of emergent Chinese indus- tariffs levied against foreign brands like Dell, Hewlett-Packard WIRELESS CARD Nasdaq Composite Madetrial in giantsThailand. to create global brand names and capture market and — so far — I.B.M., Levono now controls about 27 percent of the 2,100 Chinese PC market, which is about to pass Japan to become the Intel. Made in Malaysia. BATTERY COSTshareLaptop beyond hard their drives own borders. range Formerly relegated to a low pro- world’s second-largest personal computer market after the United Made in Asia to I.B.M. specifications.2,000 file as the cheap assemblers for the rest of the industrialized COST If not packaged with the fromworld, $1.50 Chinese to $2 acompanies gigabyte. now A have their sights set on becoming States. microprocessor, $15 to $20. COST $40 to $50 for a typical1,900 laptop battery. typicalglobal drive powers is about in their 40 own gigabytes. right. But the company is experiencing growing pains as it tries to Yesterday: The Lenovo Group, partly owned by the Chinese government, hold onto market share at home while also venturing into Western 1,800 Daily closes Sources: IDC; Portelligent Inc.; Stanford University Photographs by Earl Wilson/The New York Times (computer) and Ricky Wong/Bloomberg2,147.96 News;had sales photo ofillustration over $3 by billion The New last York year Time ands is currently ranked eighth 2004 globally among PC makers. It is the overall leader in Asia outside Continued on Page 3 1,700 JFMA MJJ ASOND Source: Bloomberg Financial Markets The New York Times

Acquired 25 Courting an Asian Buyer by Hewlett- million Although far from a done deal, a sale of I.B.M.’s personal Packard computer business to the Chinese PC maker Lenovo would 20 Nasdaq Composite help Lenovo close in on the industry leaders, Dell and 2,100 Hewlett-Packard. 15 2,000 Worldwide PC shipments 10 1,900 Yesterday: Daily closes 5 1,800 2,147.96 2004 1,700 JFMA MJJ ASOND Source: Bloomberg Financial Markets The New York Times ’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04* Source: Gartner *First three quarters The New York Times

Acquired 25 Courting an Asian Buyer by Hewlett- million Although far from a done deal, a sale of I.B.M.’s personal Packard computer business to the Chinese PC maker Lenovo would 20 help Lenovo close in on the industry leaders, Dell and Hewlett-Packard. 15

Worldwide PC shipments 10

5

’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04* Source: Gartner *First three quarters The New York Times ID NAME: Nxxx,2004-12-04,C,003,Bs-BW,E2 3 7 15 25 50 75 85 93 97

INTERNATIONAL BUSINESS ...... Failed China Fuel Supplier China’s Giant Waited Too Long for Help In PC’s Flexes Its Muscles Singapore Regulators Want Chief’s Aid Continued From First Business Page

markets. The company’s stock price re- cently plummeted after Lenovo re- ported worse-than-expected earn- ings, citing a price war in China with Dell, Hewlett-Packard and I.B.M. Lenovo may not end up acquir- ing I.B.M.’s PC business, as at least one other potential buyer is also in Shen Yu/Imaginechina China is on the brink of passing Japan to become the world’s second- Natalie Behring/Bloomberg News negotiations. And other bidders may emerge. largest personal computer market after the United States. A China Aviation Oil fuel truck But if Lenovo succeeds, acquir- makes a delivery at Capital Air- ing the I.B.M. unit would ease some port in Beijing. sition is one of the possibilities,’’ moving slowly compared with Dell’s. of the competitive pressure domesti- Mary Ma, Lenovo’s chief financial Moreover, with China’s econ- cally. Recognizing that profitable officer, said in an interview last year. omy growing rapidly, increasingly growth within China may be increas- Founded in 1984 by a group of Chi- affluent and brand-conscious people ingly hard to come by as outsiders nese scientists with government fi- are turning to Dell, I.B.M. and Hew- flock to the world’s potentially big- nancing, the company then known as lett-Packard computers. Executives gest consumer market, Levono also Legend started out as a distributor of at Lenovo are intent on competing knows it needs to expand its global computers and printers, selling with those better-known brands, say- share of the market beyond its cur- I.B.M., AST and Hewlett-Packard ing Lenovo is not interested in sim- rent 2.6 percent. Acquiring the I.B.M. models in China. ply being known as the lower-cost business, now ranked third globally, In the late 1980’s, however, as an supplier. I.B.M.’s product line would would raise that share to 8.6 percent exemplar of a trend that would play automatically push Lenovo up the — still third, but a bit closer to Dell out in many Chinese industries, the cachet curve. (18 percent) and Hewlett-Packard company moved higher up the food Most crucial to Lenovo’s world- (16.1 percent). chain by beginning to design its own wide aspirations, analysts say, would As part of its global campaign, personal computers. By 1997, it had be I.B.M.’s ThinkPad line of portable the company earlier this year shed passed I.B.M. to become the largest computers, which even among its longstanding name, Legend, in fa- seller of personal computers in Chi- American customers has a much vor of the current one, then promptly na. more devoted following than many of entered the global brand sweep- But competing globally on its the other products in I.B.M.’s line. stakes by signing on as a sponsor of own, especially against Dell’s vaunt- “This is their steppingstone to a the 2006 Winter Olympics in Turin ed manufacturing efficiencies, could global market,” said James Mulve- and the 2008 Olympic Games in Bei- be a stretch for Lenovo. An Ameri- non, a China researcher who is depu- jing. can venture capitalist who recently ty director of the Center for Intelli- To what extent, and for how toured the Lenovo factory in Shang- gence Research and Analysis, a long, Lenovo or another buyer of hai said that he had been surprised Washington research center. I.B.M.’s PC business would be able to that it lacked the bustling, just-in- Otherwise, he said, Lenovo faces make use of the I.B.M. name would time urgency that he had observed the same brand-recognition problem be a crucial question in any negotia- on a similar tour of a Dell assembly that has plagued the Taiwan comput- tions. But the company has made it line in Round Rock, Tex. er maker Acer, which ranks fifth known that it is open to deals. “Acqui- At the Lenovo site, pallets of globally, but is an also-ran in the computers were stacked high to the United States market. “This a story Keith Bradsher, in Hong Kong, and ceiling, according to the investor, about a Chinese company adopting John Markoff, in San Francisco, con- who insisted on not being identified, an American brand,’’ Mr. Mulvenon tributed reporting for this article. and he said the production line was said.

China Aviation is Contemplating a PC Market Without I.B.M. criticized for delaying the disclosure of its Continued From First Business Page Top PC Makers heavy losses. to be more aggressive on the pricing Based on worldwide front, which could lead to a compres- shipments, through the first sion on price points in the industry,” potentially eating into the profits of three quarters of 2004. every PC maker. The price for SHIPMENTS, MARKET I.B.M.’s personal computer unit is IN MILLIONS SHARE likely to be $1 billion to $2 billion. A buyer would be purchasing the blue- Dell 23.0 18.3% prints to the ThinkPad, generally re- 2 garded as the world’s most reliable H.P. 19.8 15.7 and secure laptops. I.B.M. 7.6 6.0 “The ThinkPad isn’t just the best machine for the price,” said Richard Fujitsu 5.1 4.1 Dougherty, director of the Envisio- neering Group, a market research Toshiba 4.2 3.4 firm in Seaford, L.I. “It is the ma- chine for anyone concerned about se- Acer 4.2 3.4 curity.” N.E.C. 3.5 2.8 A buyer would presumably get the ThinkPad name and also I.B.M.’s Dell Lenovo 2.9 2.3 customer list, but whether that would be worth much over time re- Dell Computer accounted for 18 Gateway* 2.9 2.3 mains to be seen. According to peo- percent of PC sales worldwide in ple close to the negotiations, a buyer the third quarter of 2004. Apple 2.5 1.9 is also likely to get the use of I.B.M.’s *Includes sales of eMachines, brand name on PC’s for a transition- not necessarily benefit over the long which Gateway bought in the al period and I.B.M. may continue to term. I.B.M.’s retreat from the PC first quarter. sell the computers to corporate cus- sector may be an irreversible transi- Source: IDC tomers after the business unit is sold. tion from a world where corporate Mr. Dougherty said he was al- workplaces have personal comput- ready hearing from I.B.M. custom- ers on each desktop to one where cor- The New York Times ers fretting about a sale to a compa- porate offices run on centralized ny that has specialized in low-price computer systems with simple moni- most of those buyers being custom- machines. “Customers are saying, tors on desks known as “thin clients” ers who also buy other equipment ‘Oh my God, we need to be assured that have network connections. and services from I.B.M. we can get ThinkPad models that are This transformation would tend to While Hewlett and Dell are expect- just as secure and reliable, and not harm Hewlett more than Dell, indus- ed to compete vigorously for I.B.M.’s just a watered-down ThinkPad try analysts said, because Hewlett, corporate market, there is evidence brand from Lenovo,’” Mr. Dougherty like I.B.M., is stronger in the corpo- this market will shrink over time. said. rate market than Dell, which sells The “thin client” concept has been While Hewlett and Dell may bene- Keith Bradsher contributed report- the bulk of its computers to consum- debated in the industry for more fit from that uncertainty, they may ing from Hong Kong for this article. ers. I.B.M.’s potential withdrawal than a decade. In the past, skeptics of from the desktop computer business that concept pointed to the PC’s flexi- indicates it has concluded that bility and convenience, as well as to WORLD BUSINESS BRIEFING growth in corporate PC sales is the problems with mainframe com- largely over. puting. cent in the July-September period from the quar- Car sales in Italy rose 0.9 Today, however, a number of fac- AMERICAS ITALY: CAR SALES RISE “If I.B.M. is getting out of the busi- ter last year. The gain was the sixth consecutive percent in November as companies enticed buy- ness because it can’t make money, tors ranging from the explosive BRAZIL: VENTURE PLANS STEEL MILL A Brazilian quarterly gain and was higher than analysts had ers with discounts and new models. Sales of Fiat then investors will ask themselves, growth of the Internet to increased mining company, Companhia Vale do Rio Doce, expected, relieving concern that revised statistics fell 2 percent, while demand surged for cars from ‘What does I.B.M. know that H.P. computer and data security con- and the German steel maker ThyssenKrupp Stahl due next week would show a contraction in the Hyundai Motor. The Fiat market share declined doesn’t know?’” said Andrew Neff, cerns are shifting the equation. Man- aging viruses and worms is easier on signed an agreement to build a steel slab plant in country’s gross domestic product. (Reuters) to 27.5 percent from 28.6 percent a year ago. Italy an analyst with Bear Stearns. centralized systems, and software the state of Rio de Janeiro, Rio Doce said. The is the biggest market for Fiat, accounting for 40 And even for I.B.M., backing away development is increasingly shifting percent of the group’s auto sales. from traditional personal computers plant, which is expected to be ready by 2008, will EUROPE to applications based on Internet- have an initial production capacity of 4.4 million (Bloomberg News) now may not help, said Jonathan Schwartz, president of Sun Microsys- based standards. tons a year. Rio Doce declined to disclose the val- RUSSIA: YUKOS SUBSIDIARY INVESTIGATED A Sibe- BRITAIN: PUB CONCERN ACQUIRED Wolverhampton tems, one of I.B.M.’s top competitors. “The days of the $3,000 desktop ue of the deal, but local media reports said the rian subsidiary of the & Dudley Breweries, an “We’ve been in the post-PC era for personal computer are over in the plant would require an initial investment of $1.5 Russian oil company operator of 1,675 pubs in four years now,” Mr. Schwartz said, corporate world,” said Terry Gar- billion. The agreement makes ThyssenKrupp the Burtonwood Yukos has been searched Britain, agreed to buy noting that last year a billion wire- nett, a venture capitalist who is a latest of a growing number of international steel by law enforcement offi- 580 pence per share Burtonwood for £119 mil- partner at Garnett & Helfrich Capi- 560 less handsets were sold compared companies that intend to build blast furnaces cers from the western Si- lion ($231 million) to ac- with 100 million personal computers. tal, based in Menlo Park, Calif. “This along Brazil’s coast. Todd Benson (NYT) berian city of Nefteyu- celerate earnings growth But Duane Zitzner, the executive is a paradigm for the future and a 480 signal of where things are going.” CANADA: JOBLESS RATE RISES Canada’s unem- gansk, a company official as Britons spend less time vice president in charge of Hewlett’s ployment rate unexpectedly rose to a five-month told the Interfax news and money in pubs. Wol- personal computer business, notes That trend has been reflected in recent analyst reports. On Thursday, high of 7.3 percent in November from 7.1 percent agency. The enforcement verhampton, which is that the sector remains profitable, 380 for example, Rebecca Runkle, an an- the previous month, as employers created the officers seized documents based in Wolverhampton, with Hewlett earning $210 million on alyst at Morgan Stanley, lowered her from the subsidiary, Yuganskneftegas, Interfax F M T W T F England, will offer 550 PC’s in the fiscal year that ended in fewest jobs since August. The economy lost 25,300 2005 growth forecast for PC unit reported. Yukos offices in Moscow and at other pence a share for Burton- October. full-time jobs as factories laid off workers for a sales by 2 percentage points, to 9 per- fourth consecutive month, Statistics Canada re- subsidiaries have been raided repeatedly over the wood, an operator of 460 British pubs, the chief ex- Moreover, Mr. Zitzner said I.B.M.’s retreat provides a golden op- cent. She noted that consumer, ported. Part-time positions rose by 30,000, leaving last year in connection with federal prosecutors’ ecutive, Ralph Findlay, said. Wolverhampton also small-business and government about 4,600 new jobs in November. The figures investigation into government claims for more posted results, reporting that full-year profit rose portunity for his company. “Any time there’s a change like this, it markets all slowed late this year. may increase expectations that the Bank of Cana- than $24 billion in back taxes owed by the oil gi- 26 percent, to £48.4 million. adds a level of uncertainty among In May, I.B.M. began offering a da will leave interest rates unchanged at its poli- ant. Russian President Vladimir V. Putin, on a (Bloomberg News) customers buying equipment,” he thin software application called cy meeting next week. (Bloomberg News) three-day visit to India, said the Russian govern- FINLAND: DEPARTURES AT NOKIA Two executives said. Workplace — based on the Java pro- ment would welcome a bid by companies in India in charge of the networks division at Nokia, the gi- Dell accounted for 18 percent of gramming language —intended for Web-based computing where data is ASIA to buy assets of Yuganskneftegas. A 77 percent ant mobile phone maker, are leaving the compa- PC sales — including laptops — stake in the subsidiary is to be auctioned on Dec. ny for personal reasons, the company said. Sari worldwide in the third quarter of managed and stored centrally. JAPAN: CAPITAL SPENDING RISES Spending on 19 to help Yukos pay back taxes. The Indian oil Baldauf, the head of Nokia’s networks division, 2004, according to I.D.C., compared I.B.M. is betting that such systems plant and equipment by Japanese companies in- minister, Mani Shankar Aiyar, above, said Mr. will leave next month and J. T. Bergqvist, the with Hewlett’s 16.1 percent market will be increasingly attractive to cor- creased in the third quarter, a government sur- Putin “welcomed bids by Indian firms, either on head of the global business units of Nokia net- share. I.B.M. was a distant third at porate customers and will conse- quently diminish the once mighty vey showed. A quarterly survey by the Ministry their own or in collaboration with Russian firms,” works, will resign on Jan. 31. (AP) 5.2 percent. I.B.M.’s sales are almost personal computer business. of Finance showed capital spending rose 14.4 per- Reuters reported. Erin E. Arvedlund (NYT) exclusively to corporate buyers, with C M Y ID NAME: Nxxx,2004-12-04,C,001,Bs-BK,E2 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

BUSINESS

Around the World Costs are In One Laptop estimates of what manufacturers pay Personal computers that have the for components. I.B.M. name on them are built from an international array of components. Here is a look DISPLAY SCREEN inside an I.B.M. ThinkPad X31 Two of the major selling for $2,349. screen makers are Samsung and LG ASSEMBLY Philips in Mexico. South Korea.

MEMORY COST A 15-inch screen 10 manufacturers worldwide, is about $200; 17-inch the largest in Korea. about $300. COST 512 megabytes GRAPHICS for about $60. CONTROLLER CHIP ATI. Made in Canada. CASE AND KEYBOARD TSMC. Made in Taiwan. Made in Thailand. COST $30 to $100. COST $50.

MICROPROCESSOR Intel. Made in the U.S. COST Intel’s Centrino chip includes wireless capabilties, $275 to $500.

HARD DRIVE WIRELESS CARD Made in Thailand. Intel. Made in Malaysia. BATTERY COST Laptop hard drives range COST If not packaged with the Made in Asia to I.B.M. specifications. from $1.50 to $2 a gigabyte. A microprocessor, $15 to $20. COST $40 to $50 for a typical laptop battery. typical drive is about 40 gigabytes.

Sources: IDC; Portelligent Inc.; Stanford University Photographs by Earl Wilson/The New York Times (computer) and Ricky Wong/Bloomberg News; photo illustration by The New York Times

C M Y ID NAME: Nxxx,2004-12-04,C,001,Bs-BK,E2 YELO MAG CYAN 3 7 15 25 50 75 85 93 97 Nasdaq Composite 2,100

2,000

1,900 Yesterday: Daily closes 1,800 2,147.96 2004 1,700 JFMA MJJ ASOND Source: Bloomberg Financial Markets The New York Times SATURDAY, DECEMBER 4, 2004 Contemplating a PC Market Without I.B.M.

Acquired 25 By GARY RIVLIN Courting an Asian Buyer by Hewlett- million and JOHN MARKOFF Although far from a done deal, a sale of I.B.M.’s personal Packard BUSINESS computer business to the Chinese PC maker Lenovo would 20 SAN FRANCISCO, Dec. 3 — Inside Hew- help Lenovo close in on the industry leaders, Dell and lett-Packard, the world’s second-largest Hewlett-Packard. personal computer maker, executives 15 greeted the news on Friday that I.B.M., the Worldwide PC shipments world’s No. 3 PC maker, might be retreat- 10 ing from the market, with good cheer. Executives at Dell Computer, the largest personal computer maker, would not com- 5 ment, but some industry analysts speculat- ed that they too were smiling about I.B.M.’s decision. Still, many in the industry were con- ’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04* cerned that an I.B.M. withdrawal could ac- Source: Gartner *First three quarters The New York Times celerate competition in an industry where prices were already falling. a sale to Lenovo may create a powerful known as Legend, could have the power to Around the World According to peopleCosts close are to the negotia- new rival with operations based in China. further squeeze down PC prices because of In One Laptop tions, I.B.M. is in seriousestimates discussions of what to sell Alan Promisel, an analyst at the re- its track record as a producer of low-cost its PC business to Lenovomanufacturers, the largest pay mak- search firm I.D.C., said a deal with Lenovo machines. Personal computers that have the er of PC’s in China —for a components. rapidly expanding “would put up a significant roadblock to “If they’re able to complete a deal,” Mr. I.B.M. name on them are built market that Hewlett-Packard and Dell cov- Dell and H.P.’s Asia Pacific expansion, at Promisel said, “Lenovo is obviously going from an international array of et. I.B.M. is in talks with at least one other least potentially so.” Mr. Promisel and oth- potential buyer. Industry experts note that ers noted that a larger Lenovo, formerly components. Here is a look DISPLAY SCREEN Continued on Page 3 inside an I.B.M. ThinkPad X31 Two of the major selling for $2,349. screen makers are Samsung and LG ASSEMBLY Philips in Mexico. South Korea.

MEMORY COST A 15-inch screen 10 manufacturers worldwide, is about $200; 17-inch the largest in Korea. about $300. COST 512 megabytes GRAPHICS for about $60. CONTROLLER CHIP ATI. Made in Canada. CASE AND KEYBOARD TSMC. Made in Taiwan. Made in Thailand. COST $30 to $100. COST $50.

MICROPROCESSOR Intel. Made in the U.S. COST Intel’s Centrino chip includes wireless capabilties, $275 to $500.

HARD DRIVE WIRELESS CARD Made in Thailand. Intel. Made in Malaysia. BATTERY COST Laptop hard drives range COST If not packaged with the Made in Asia to I.B.M. specifications. from $1.50 to $2 a gigabyte. A microprocessor, $15 to $20. COST $40 to $50 for a typical laptop battery. typical drive is about 40 gigabytes.

Sources: IDC; Portelligent Inc.; Stanford University Photographs by Earl Wilson/The New York Times (computer) and Ricky Wong/Bloomberg News; photo illustration by The New York Times

Nasdaq Composite 2,100

2,000

1,900 Yesterday: Daily closes 1,800 2,147.96 2004 1,700 JFMA MJJ ASOND Source: Bloomberg Financial Markets The New York Times

Acquired 25 Courting an Asian Buyer by Hewlett- million Although far from a done deal, a sale of I.B.M.’s personal Packard computer business to the Chinese PC maker Lenovo would 20 help Lenovo close in on the industry leaders, Dell and Hewlett-Packard. 15

Worldwide PC shipments 10

5

’82 ’84 ’86 ’88 ’90 ’92 ’94 ’96 ’98 ’00 ’02 ’04* Source: Gartner *First three quarters The New York Times ID NAME: Nxxx,2004-12-04,C,003,Bs-BW,E2 3 7 15 25 50 75 85 93 97

INTERNATIONAL BUSINESS ...... Failed ChinaID FuelNAME: Nxxx,2004-12-04,C,003,Bs-BW,E2Supplier China’s Giant 3 7 15 25 50 75 85 93 97 Waited Too Long for Help In PC’s Flexes Its Muscles

SingaporeINTERNATIONAL Regulators BUSINESS ...... Want...... Chief’s...... Continued From First Business Page

Failed China Fuel Supplier China’smarkets. Giant The company’s stock price re- cently plummeted after Lenovo re- Inported PC’s worse-than-expected Flexes earn- Waited Too Long for Help ings, citing a price war in China with Dell, Hewlett-Packard and I.B.M. Lenovo may not end up acquir- Its Muscles 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-04,C,003,Bs-BW,E2 ing I.B.M.’s PC business, as at least Singapore Regulators Want Chief’s Aid one other potential buyer is also in Shen Yu/Imaginechina Continued From First Business Page China is on the brink of passing Japan to become the world’s second- Natalie Behring/Bloomberg News negotiations. And other bidders may emerge. largest personal computer market after the United States. A China Aviation Oil fuel truck But if Lenovo succeeds, acquir- makes a delivery at Capital Air- markets. ing theThe I.B.M. company’s unit would stock ease price some re- port in Beijing. sition is one of the possibilities,’’ moving slowly compared with Dell’s. centlyof the competitive plummeted pressure after Lenovo domesti- re- Mary Ma, Lenovo’s chief financial Moreover, with China’s econ- portedcally. Recognizing worse-than-expected that profitable earn- officer, said in an interview last year. omy growing rapidly, increasingly growth within China may be increas- INTERNATIONAL BUSINESS ...... Dellingly, Hewlett-Packard hard to come byand as I.B.M. outsiders nese scientists with government fi- are turning to Dell, I.B.M. and Hew- flockLenovo to the may world’s not potentially end up acquir- big- nancing, the company then known as lett-Packard computers. Executives inggest I.B.M.’s consumer PC market,business, Levono as at least also Legend started out as a distributor of at Lenovo are intent on competing Failed China Fuel Supplier oneknowsChina’s other it needs potential to expand buyerGiant isits also global in computers and printers, selling with those better-knownShen brands,Yu/Imaginechina say- share of the market beyond its cur- China is on the brink of passing Japan to become the world’s second- Natalie Behring/Bloomberg News negotiations. And other bidders may I.B.M., AST and Hewlett-Packard ing Lenovo is not interested in sim- emerge.rent 2.6 percent. Acquiring the I.B.M. largest personal computer market after the United States. A China Aviation Oil fuel truck models in China. ply being known as the lower-cost Waited Too Long for Help business,InBut PC’s if now Lenovo ranked succeeds, Flexes third globally, acquir- In the late 1980’s, however, as an supplier. I.B.M.’s product line would 3 7 15 25 50 75 85 93 97 makes a delivery at Capital Air- ingwould the raise I.B.M. that unit share would to 8.6ease percent some exemplar of a trend that would play automatically push Lenovo up the ID NAME: Nxxx,2004-12-04,C,003,Bs-BW,E2 port in Beijing. — still third, but a bit closer to Dell sition is one of the possibilities,’’ moving slowly compared with Dell’s. of the competitive pressure domesti- Maryout in Ma,many Lenovo’s Chinese chief industries, financial the cachetMoreover, curve. with China’s econ- cally.(18Its percent) RecognizingMuscles and Hewlett-Packard that profitable company moved higher up the food Most crucial to Lenovo’s world- (16.1 percent). officer, said in an interview last year. omy growing rapidly, increasingly growth within China may be increas- Foundedchain by beginning in 1984 by to a design group its of Chi-own affluentwide aspirations, and brand-conscious analysts say, peoplewould Singapore Regulators Want Chief’s Aid As part of its global campaign, ingly hard to come by as outsiders nesepersonal scientists computers. with governmentBy 1997, it had fi- arebe I.B.M.’s turning ThinkPad to Dell, I.B.M. line of and portable Hew- theContinued company From3 earlier7 First15 25 thisBusiness50 year75 Page85 shed93 97 flock to the world’s potentially big- nancing,passed I.B.M. the company to become then the known largest as lett-Packardcomputers, computers. which even Executives among ID NAME: Nxxx,2004-12-04,C,003,Bs-BW,E2 its longstanding name, Legend, in fa- gest consumer market, Levono also Legendseller of started personal out computers as a distributor in Chi- of atAmerican Lenovo arecustomers intent on has competing a much vormarkets. of the current one, then promptly knows it needs to expand its global computersna. and printers, selling withmore those devoted better-known following than brands, many say- of shareenteredThe of the thecompany’s market global beyondstock brand price its sweep- cur- re- But competing globally on its the other products in I.B.M.’s line.

INTERNATIONAL BUSINESS ...... stakes by signing on as a sponsor of rentcently 2.6 plummetedpercent. Acquiring after Lenovo the I.B.M. re- modelsown, especially in China. against Dell’s vaunt- ply being“This is known their steppingstone as the lower-cost to a the 2006 Winter Olympics in Turin business,ported worse-than-expectednow ranked third globally, earn- ed manufacturingIn the late 1980’s, efficiencies, however, couldas an supplier.global market,” I.B.M.’s saidproduct James line Mulve-would and the 2008 Olympic Games in Bei- wouldings, citing raise athat price share war toin 8.6China percent with exemplarbe a stretch of a for trend Lenovo. that would An Ameri- play automaticallynon, a China researcher push Lenovo who is up depu- the jing. Failed China Fuel Supplier China’s Giant —Dell still, Hewlett-Packard third, but a bit andcloser I.B.M. to Dell outcan in venture many capitalistChinese industries, who recently the cachetty director curve. of the Center for Intelli- To what extent, and for how (18 percent)Lenovo may and not Hewlett-Packard end up acquir- companytoured the moved Lenovo higher factory up in the Shang- food genceMost Research crucial to and Lenovo’s Analysis, world- a INTERNATIONAL BUSINESS ...... (16.1ing I.B.M.’s percent). PC business, as at least chainhai said by thatbeginning he had to beendesign surprised its own wideWashington aspirations, research analysts center. say, would I.B.M.’s PC business would be able to Shen Yu/Imaginechina In PC’s Flexes one As other part potential of its global buyer campaign, is also in personalthat it lacked computers. the bustling, By 1997, just-in- it had be I.B.M.’sOtherwise, ThinkPad he said, line Lenovo of portable faces Waited Too Long for Help makenegotiations. use of theAnd I.B.M.other bidders name would may China is on the brink of passing Japan to become the world’s second- Natalie Behring/Bloomberg News the company earlier this year shed passedtime urgency I.B.M. to that become he had the observed largest computers,the same brand-recognition which even problem among be a crucial question in any negotia- largest personal computer market after the United States. itsemerge. longstanding name, Legend, in fa- selleron a similar of personal tour ofcomputers a Dell assembly in Chi- Americanthat has plagued customers the Taiwan has a comput- much Failed China Fuel Supplier China’sA China Aviation Giant Oil fuel truck tions. But the company has made it Its Muscles vor ofBut the if current Lenovo one, succeeds, then promptly acquir- na.line in Round Rock, Tex. moreer maker devoted Acer following, which than ranks many fifth of makes a delivery at Capital Air- enteredknowning the that I.B.M. the it is globalunit open would to brand deals. ease “Acqui- sweep- some At the Lenovo site, pallets of globally, but is an also-ran in the port in Beijing. sitionBut is competing one of the globally possibilities,’’ on its themoving other slowly products compared in I.B.M.’s with line. Dell’s. Singapore Regulators Want Chief’s Aid stakesof the competitiveby signing onpressure as a sponsor domesti- of own,computersMary especially Ma, were Lenovo’s against stacked chief Dell’s high financial vaunt-to the United“ThisMoreover, States is their market. with steppingstone China’s “This a storyecon- to a Waited Too Long for Help In PC’s Flexes Keithcally. Bradsher, Recognizing in Hong that Kong, profitable and Continued From First Business Page the 2006 Winter Olympics in Turin edceiling,officer, manufacturing said according in an interview efficiencies, to the last investor, couldyear. globalaboutomy growing a market,” Chinese rapidly, said company James increasingly adopting Mulve- andJohngrowth the Markoff, within2008 Olympic China in San mayFrancisco, Games be increas- in con-Bei- bewhoFounded a insisted stretch in 1984 foron not Lenovo. by being a group An identified, Ameri- of Chi- non,anaffluent American a China and researcher brand-consciousbrand,’’ Mr. who Mulvenon is peopledepu- markets.Its Muscles jing.tributedingly hard reporting to come for by this as article. outsiders canandnese venturehe scientists said the capitalist with production government who linerecently was fi- tysaid.are director turning ofto theDell, Center I.B.M. for and Intelli- Hew- The company’s stock price re- flockTo to what the world’s extent, potentially and for how big- tourednancing, the the Lenovo company factory then inknown Shang- as gencelett-Packard Research computers. and Analysis, Executives a Singapore Regulators Want Chief’s Aid cently plummeted after Lenovo re- long,gest consumer Lenovo or market, another Levono buyer also of haiLegend said started that he out had as beena distributor surprised of Washingtonat Lenovo areresearch intent center. on competing portedContinued worse-than-expected From First Business earn-Page I.B.M.’sknows it PC needs business to expand would be its able global to thatcomputers it lacked and the printers, bustling, just-in- selling withOtherwise, those better-known he said, Lenovo brands, faces say- China Aviation is ings, citing a price war in China with makeshare use of the of marketthe I.B.M. beyond name its would cur- timeI.B.M., urgency AST and that heHewlett-Packard had observed theing same Lenovo brand-recognition is not interested problem in sim- rent 2.6 percent. Acquiring the I.B.M. Dellmarkets., Hewlett-Packard and I.B.M. beContemplating a crucial question in any negotia- onmodelsa a PCsimilar in China. tourMarket of a Dell assembly Withoutthatply beinghas plagued known the I.B.M. as Taiwan the lower-cost comput- business, now ranked third globally, criticized for delaying LenovoThe company’s may not stock end up price acquir- re- tions. But the company has made it line inIn Round the late Rock, 1980’s, Tex. however, as an ersupplier. maker I.B.M.’s Acer, product which ranks line would fifth would raise that share to 8.6 percent ingcently I.B.M.’s plummeted PC business, after Lenovoas at least re- known that it is open to deals. “Acqui- exemplarAt the of Lenovoa trend that site, would pallets play of globally,automatically but is push an also-ran Lenovo up in the —Continued still third, From but Firsta bit Business closer to Page Dell Shen Yu/Imaginechina the disclosure of its oneported other worse-than-expected potential buyer is also earn- in computersout in many were Chinese stacked industries, high to the Unitedcachet curve. States market. “This a story (18 percent) and Hewlett-Packard Top PC Makers negotiations.ings, citing a Andprice other war inbidders China maywith KeithChina Bradsher, is on the inbrink Hong of Kong,passing and Japanceiling,company to become according moved the higher toworld’s the up investor,second- the food aboutMost a Chinese crucial companyto Lenovo’s adopting world- Natalie Behring/Bloomberg News (16.1to be percent).more aggressive on the pricing heavy losses. emerge.Dell, Hewlett-Packard and I.B.M. Johnlargest Markoff, personal in Sancomputer Francisco, market con- afterwhochain the insisted byUnited beginning on States. not to being design identified, its own anwide AmericanBased aspirations, on brand,’’ worldwide analysts Mr. say,Mulvenon would A China Aviation Oil fuel truck front,As which part could of its lead global to a campaign, compres- ButLenovo if Lenovo may not succeeds, end up acquir- tributed reporting for this article. andpersonal he said computers. the production By 1997, line it was had said.be I.B.M.’sshipments, ThinkPad through line the of firstportable makes a delivery at Capital Air- thesion companyon price points earlier in this the yearindustry,” shed inging theI.B.M.’s I.B.M. PC unit business, would easeas at someleast passed I.B.M. to become the largest computers, which even among sitionitspotentially longstanding is one eating of name, the into possibilities,’’Legend, the profits in fa- of moving slowly compared with Dell’s. three quarters of 2004. port in Beijing. ofone the other competitive potential pressure buyer isdomesti- also in seller of personal computersShen Yu/Imaginechina in Chi- American customers has a much Maryvorevery of the Ma, PC current Lenovo’s maker. one, The chiefthen pricepromptly financial for Moreover, with China’s econ- cally.negotiations. Recognizing And other that bidders profitable may China is on the brink of passing Japanna. to become the world’s second- more devotedSHIPMENTS, following thanMARKET many of Natalie Behring/Bloomberg News officer,enteredI.B.M.’s said personalthe in globalan interview computer brand last sweep-unit year. is omy growing rapidly, increasingly China Aviation is growthemerge. within China may be increas- Foundedlargest personal in 1984 bycomputer a group market of Chi- afteraffluent theBut United and competing brand-conscious States. globally people on its the other productsIN MILLIONS in I.B.M.’sSHARE line. A China Aviation Oil fuel truck stakeslikely toby be signing $1 billion on as to a$2 sponsor billion. ofA own, especially against Dell’s vaunt- “This is their steppingstone to a inglyBut hard if Lenovo to come succeeds, by as outsiders acquir- neseContemplating scientists with government fi- area turningPC to Market Dell, I.B.M. and Hew- WithoutDell 23.0 I.B.M.18.3% makes a delivery at Capital Air- flock to the world’s potentially big- thebuyer 2006 would Winter be purchasing Olympics inthe Turinblue- ed manufacturing efficiencies, could global market,” said James Mulve- criticized for delaying ing the I.B.M. unit would ease some nancing,sition is the one company of the then possibilities,’’ known as lett-Packardmoving slowly computers. compared with Executives Dell’s. port in Beijing. gest consumer market, Levono also andprints the to 2008 the ThinkPad,Olympic Games generally in Bei- re- be a stretch for Lenovo. An Ameri- non, a China researcher who is depu- of the competitive pressure domesti- LegendgardedMary Ma, started as the Lenovo’s world’sout as a chief mostdistributor financial reliable of at LenovoMoreover, are intent with China’son competing econ- H.P. 19.8 15.7 knows it needs to expand its global jing.Continued From First Business Page can venture capitalist who recently ty director of the Center for Intelli- the disclosure of its cally. Recognizing that profitable computersandofficer, secure said laptops. in and an interview printers, last selling year. withomy those growing better-known rapidly, brands, increasingly say- share of the market beyond its cur- To what extent, and for how toured the Lenovo factory in Shang- genceI.B.M.Top Research PC7.6 Makers and Analysis,6.0 a growth within China may be increas- I.B.M.,Founded“The ThinkPad AST in 1984 and by isn’t Hewlett-Packard a group just the of bestChi- ingaffluent Lenovo and is brand-conscious not interested in people sim- rent 2.6 percent. Acquiring the I.B.M. long,to be more Lenovo aggressive or another on the buyer pricing of hai said that he had been surprised Washington research center. heavy losses. ingly hard to come by as outsiders modelsmachinenese scientists in for China. the withprice,” government said Richard fi- plyare beingturning known to Dell, as I.B.M. the lower-costand Hew- Based on worldwide business, now ranked third globally, I.B.M.’sfront, which PC business could lead would to a becompres- able to that it lacked the bustling, just-in- FujitsuOtherwise,5.1 he said, Lenovo4.1 faces flock to the world’s potentially big- Dougherty,nancing,In the the late directorcompany 1980’s, ofhowever, then the known Envisio- as anas supplier.lett-Packard I.B.M.’s computers. product Executivesline would shipments, through the first would raise that share to 8.6 percent makesion on use price of thepoints I.B.M. in the name industry,” would time urgency that he had observed the same brand-recognition problem gest consumer market, Levono also exemplarneeringLegend started Group, of a trend out a as market that a distributor would research play of automaticallyat Lenovo are push intent Lenovo on competing up the Toshibathree quarters4.2 of 2004. 3.4 — still third, but a bit closer to Dell bepotentially a crucial eating question into in the any profits negotia- of on a similar tour of a Dell assembly that has plagued the Taiwan comput- knows it needs to expand its global outfirmcomputers in in many Seaford, andChinese L.I. printers, industries, “It is the selling ma- the cachetwith those curve. better-known brands, say- (18 percent) and Hewlett-Packard tions.every But PC the maker. company The has price made for it line in Round Rock, Tex. er maker Acer, which ranks fifth share of the market beyond its cur- companychineI.B.M., for AST anyone moved and concerned higher Hewlett-Packard up about the food se- ing LenovoMost crucial is not to interested Lenovo’s inworld- sim- Acer SHIPMENTS,4.2 MARKET3.4 (16.1 percent). knownI.B.M.’s that personal it is open computer to deals. “Acqui- unit is At the Lenovo site, pallets of globally, but is an also-ran in the rent 2.6 percent. Acquiring the I.B.M. chaincurity.”models by in beginning China. to design its own wideply beingaspirations, known analysts as the say, lower-cost would IN MILLIONS SHARE As part of its global campaign, likely to be $1 billion to $2 billion. A computers were stacked high to the UnitedN.E.C. States market.3.5 “This 2.8 a story business, now ranked third globally, personalA buyerIn the computers. latewould 1980’s, presumably Byhowever, 1997, get it as hadthe an besupplier. I.B.M.’s I.B.M.’s ThinkPad product line of line portable would the company earlier this year shed Keithbuyer Bradsher,would be purchasing in Hong Kong, the blue- and ceiling, according to the investor, aboutDell a Chinese23.0 company 18.3 adopting% would raise that share to 8.6 percent passedThinkPadexemplar I.B.M. of name a totrend become and that also thewould I.B.M.’slargest play computers,automatically which push Lenovo even amongup the Johnprints Markoff, to the ThinkPad, in San Francisco, generally con- re- Dell Lenovo 2.9 2.3 its— stilllongstanding third, but name, a bit Legend,closer to in Dell fa- seller of personal computers in Chi- Americanwho insisted customers on not being has identified, a much an American brand,’’ Mr. Mulvenon tributedgardedcustomerout in many asreporting the list, Chinese world’s but for this industries, whether most article. reliable that the cachet curve. H.P. 19.8 15.7 vor(18 of percent) the current and one, Hewlett-Packard then promptly na. moreandDell he devoted Computer said the following production accounted than linemany for was 18of said. andwouldcompany secure be worthmoved laptops. much higher over up thetime food re- Most crucial to Lenovo’s world- Gateway* 2.9 2.3 entered(16.1 percent). the global brand sweep- But competing globally on its thepercent other ofproducts PC sales in I.B.M.’s worldwide line. in I.B.M. 7.6 6.0 mainschain“The by to ThinkPad beginning be seen. isn’tAccording to design just the its to bestpeo-own wide aspirations, analysts say, would stakesAs by part signing of its on global as a sponsor campaign, of own, especially against Dell’s vaunt- “This is their steppingstone to a Apple 2.5 1.9 machineplepersonal close forto computers. the the negotiations, price,” By said 1997, Richarda itbuyer had thebe I.B.M.’s third quarter ThinkPad of 2004. line of portable thethe 2006company Winter earlier Olympics this year in Turin shed edis alsomanufacturing likely to get efficiencies,the use of I.B.M.’s could global market,” said James Mulve- Fujitsu 5.1 4.1 Dougherty,passed I.B.M. director to become of the the Envisio- largest computers, which even among *Includes sales of eMachines, China Aviation is andits longstanding the 2008 Olympic name, Games Legend, in in Bei- fa- bebrand a stretch name on for PC’s Lenovo. for a Antransition- Ameri- non, a China researcher who is depu- neeringseller of Group,personal a computers market research in Chi- notAmerican necessarily customers benefit hasover athe much long Toshibawhich Gateway4.2 bought in the3.4 jing.vor of the current one, then promptly canalContemplating period venture and capitalistI.B.M. may who continue recently to tya director PC of Market the Center for Intelli- Without I.B.M. firmna. in Seaford, L.I. “It is the ma- term.more devoted I.B.M.’s following retreat fromthan many the PC of first quarter. criticized for delaying enteredTo what the global extent, brand and for sweep- how toured the Lenovo factory in Shang- gence Research and Analysis, a chinesell theBut for computers anyone competing concerned to globally corporate about on cus- se- its sectorthe other may products be an irreversible in I.B.M.’s line. transi- Acer 4.2 3.4 long,stakes Lenovo by signing or anotheron as a sponsor buyer of hai said that he had been surprised Washington research center. Source: IDC curity.”tomersown,Continued especially after From the against businessFirst Business Dell’s unit isvaunt- Page sold. tion “This from is a their world steppingstone where corporate to a the disclosure of its I.B.M.’sthe 2006 PC Winter business Olympics would be in able Turin to that it lacked the bustling, just-in- N.E.C. 3.5 2.8 edAMr. manufacturing buyer Dougherty would presumably efficiencies, said he was get could the al- workplacesglobalOtherwise, market,” have he said said, personal James Lenovo comput- Mulve- faces makeand the use 2008 of Olympic the I.B.M. Games name in would Bei- timeready urgency hearing that from he I.B.M. had observed custom- the same brand-recognition problem Top PC Makers ThinkPadbeto be a stretchmore nameaggressive for Lenovo. and on also the An I.B.M.’s Ameri-pricing ersnon, on a eachChina desktop researcher to one who where is depu- cor- The New York Times heavy losses. bejing. a crucial question in any negotia- oners a fretting similar abouttour of a salea Dell to assemblya compa- that has plagued the Taiwan comput-Dell LenovoBased on worldwide2.9 2.3 customercanfront, venture which list, could capitalist but lead whether to who a compres- recently that poratety director offices of the run Center on centralized for Intelli- tions.To But what the company extent, and has for made how it lineny thatin Round has specializedRock, Tex. in low-price erDell maker Computer Acer, accounted which ranks for fifth 18 mostshipments, of those buyers through being the first custom- wouldtouredsion on be theprice worth Lenovo points much factory in the over industry,”in time Shang- re- computergence Research systems with and simple Analysis, moni- a Gateway* 2.9 2.3 knownlong, Lenovothat it is oropen another to deals. buyer “Acqui- of machines.At the “Customers Lenovo site, are pallets saying, of globally, but is an also-ran in the ers who also buy other equipment mainshaipotentially said to that be eating seen. he had Accordinginto been the surprised profits to peo- of percenttorsWashington on desks of PCresearch known sales as center.worldwide “thin clients” in three quarters of 2004. I.B.M.’s PC business would be able to computers‘Oh my God, were we stacked need to high be assured to the United States market. “This a story and services from I.B.M. plethatevery close it PC lacked to the maker. negotiations, the bustling, The price a just-in- buyer for thethat third Otherwise,have quarternetwork he ofconnections.said, 2004. Lenovo faces Apple 2.5 1.9 Keithmake Bradsher,use of the in I.B.M. Hong name Kong, would and ceiling,we can get according ThinkPad to models the investor, that are about a Chinese company adopting While HewlettSHIPMENTS, and Dell areMARKET expect- istimeI.B.M.’s also urgency likely personal to thatget the computer he use had of observed I.B.M.’s unit is theThis same transformation brand-recognition would problem tend to Johnbe a crucialMarkoff, question in San Francisco,in any negotia- con- whojust insistedas secure on and not reliable, being identified, and not an American brand,’’ Mr. Mulvenon ed to*Includes competeIN sales MILLIONS vigorously of eMachines, forSHARE I.B.M.’s brandonlikely a similar nameto be $1 ontour billionPC’s of afor toDell a$2 transition- assemblybillion. A harmthat has Hewlett plagued more the thanTaiwan Dell, comput- indus- tributedtions. But reporting the company for this has article. made it andjust he a said watered-down the production ThinkPad line was said.not necessarily benefit over the long corporatewhich Gateway market, bought there in is the evidence allinebuyer period in Roundwould and beRock,I.B.M. purchasing Tex. may continue the blue- to tryer maker analysts Acer said,, which because ranks Hewlett, fifth Dell 23.0 18.3% known that it is open to deals. “Acqui- brand from Lenovo,’” Mr. Dougherty term. I.B.M.’s retreat from the PC thisfirst market quarter. will shrink over time. sellprints theAt to computers the the LenovoThinkPad, to site,corporate generally pallets cus- re- of likeglobally, I.B.M., but is isstronger an also-ran in the incorpo- the said. sector may be an irreversible transi- The “thin client” concept has been tomerscomputersgarded after as thewere the world’s businessstacked most unithigh reliable is to sold. the rateUnited market States than market. Dell, “This which a story sells Source:H.P. IDC 19.8 15.7 While Hewlett and Dell may bene- tion from a world where corporate debated in the industry for more Keith Bradsher contributed report- Keith Bradsher, in Hong Kong, and ceiling,andMr. secure Dougherty according laptops. said to the he investor, was al- theabout bulk a of Chinese its computers company to adoptingconsum- fit from that uncertainty, they may workplaces have personal comput- thanI.B.M. a decade. In7.6 the past, skeptics6.0 of ingChina from Hong Aviation Kong for this is article. John Markoff, in San Francisco, con- readywho“The insisted hearing ThinkPad on from not isn’t being I.B.M. just identified, custom-the best ers.an American I.B.M.’s brand,’’ potential Mr. withdrawal Mulvenon The New York Times ers on each desktop to one where cor- that concept pointed to the PC’s flexi- tributedContemplating reporting for this article. ersandmachinea fretting hePC said for about theMarket price,” production a sale said to a line Richardcompa- wasWithoutfromsaid. the desktop I.B.M.computer business porate offices run on centralized bilityFujitsu and convenience,5.1 as well4.1 as to criticized for delaying nyDougherty, that has director specialized of thein low-price Envisio- indicates it has concluded that most of those buyers being custom- WORLD BUSINESS BRIEFING computer systems with simple moni- the problems with mainframe com- machines.neering Group, “Customers a market are research saying, growth in corporate PC sales is ers Toshiba who also buy4.2 other equipment3.4 Continued From First Business Page tors on desks known as “thin clients” puting. the disclosure of its ‘Ohfirm my in God, Seaford, we need L.I. “It to be is theassured ma- largely over. and services from I.B.M. cent in the July-September period from the quar- Car sales in Italy rose 0.9 that have network connections. Today, however, a number of fac- AMERICAS ITALY: CAR SALESwechine can RISE for get anyone ThinkPad concerned models about that are se- “IfTop I.B.M. PC is getting Makers out of the busi- WhileAcer Hewlett4.2 and Dell are 3.4expect- China Aviation is This transformation would tend to tors ranging from the explosive heavy losses. ter last year. The gain wastoContemplating the be moresixth consecutiveaggressive on thepercent pricing in November justcurity.”a asPC secure as companiesMarket and reliable, enticed and buy- notWithoutness because it can’tI.B.M. make money, ed to compete vigorously for I.B.M.’s harmBased Hewlett on worldwidemore than Dell, indus- growthN.E.C. of the 3.5 Internet to increased2.8 BRAZIL: VENTURE PLANS STEEL MILL A Brazilian quarterly gain and was higherfront, than which analysts could lead had to a erscompres- with discountsjustA buyer aand watered-downnewwould models. presumably Sales ThinkPad ofget Fiat the then investors will ask themselves, corporate market, there is evidence criticized for delaying try analystsshipments, said, through because the first Hewlett, computer and data security con- mining company, Companhia Vale do Rio Doce, expected, relieving concernsion that on revised price pointsstatistics in the industry,”fell 2 percent,brandThinkPad while from demand nameLenovo,’” surged and Mr. for also Dougherty cars I.B.M.’s from ‘What does I.B.M. know that H.P. this market will shrink over time. like three I.B.M., quarters is stronger of 2004. in the corpo-Dell cernsLenovo are shifting2.9 the equation.2.3 Man- and the German steel maker ThyssenKrupp Stahl due next week would showpotentiallyContinued a contraction From eating First in into the Business the Hyundai profits Page of Motorsaid.customer. The Fiat list, market but share whether declined that doesn’t know?’” said Andrew Neff, The “thin client” concept has been the disclosure of its rate market than Dell, which sells aging viruses and worms is easier on signed an agreement to build a steel slab plant in country’s gross domestic product.every PC maker.(Reuters) The priceto 27.5 forpercentwould Whilefrom be 28.6Hewlett worth percent muchand a Dell year over may ago. time bene- Italy re- anDell analystTop Computer withPCSHIPMENTS, BearMakers accounted Stearns.MARKET for 18 debatedGateway* in the2.9 industry for2.3 more Keith Bradsher contributed report- the bulk of its computers to consum- centralized systems, and software the state of Rio de Janeiro, Rio Doce said. The I.B.M.’sto be more personal aggressive computer on theis thepricing unit biggest is fitmains market from to that befor seen.Fiat, uncertainty, Accordingaccounting they to for may peo- 40 percentAnd even ofIN forPC MILLIONS I.B.M.,sales worldwidebackingSHARE away in than a decade. In the past, skeptics of ingheavy from Hong losses. Kong for this article. ers. Based I.B.M.’s on worldwide potential withdrawal development is increasingly shifting likelyfront, whichto be $1could billion lead to to $2 a percentcompres-billion. Aof theple group’s close toauto the sales. negotiations, a buyer fromthe third traditional quarter personal of 2004. computers thatApple concept pointed2.5 to the PC’s1.9 flexi- plant, which is expected to be ready by 2008, will EUROPE fromDellshipments, the desktop23.0 through computer the 18.3businessfirst % to applications based on Internet- buyersion on would price bepoints purchasing in the industry,” the blue- is also likely to get(Bloomberg the use of I.B.M.’s News) now may not help, said Jonathan bility and convenience, as well as to have an initial production capacity of 4.4 million indicatesthree quarters it has of concluded 2004. that based*Includes standards. sales of eMachines, WORLD BUSINESSprintspotentially BRIEFINGto the eating ThinkPad, into thegenerally profits re- of brand name on PC’s for a transition- Schwartz, president of Sun Microsys- the problems with mainframe com- tons a year. Rio Doce declined to disclose the val- RUSSIA: YUKOS SUBSIDIARY INVESTIGATED A Sibe- BRITAIN: PUB CONCERN ACQUIRED Wolverhampton growthnot H.P.necessarily in corporate19.8 benefit PCover 15.7 salesthe long is “Thewhich days Gateway of thebought $3,000 in the desktop gardedevery PCas the maker. world’s The most price reliable for al period and I.B.M. may continue to tems, one of I.B.M.’s top competitors. puting. ue of the deal, but local media reports said the rian subsidiary of the & Dudley Breweries, an largelyterm. I.B.M.’s over.SHIPMENTS, retreat fromMARKET the PC personalfirst quarter. computer are over in the cent in the July-SeptemberandI.B.M.’s period secure from personal laptops. the quar- computerITALY: unit CAR is SALESsell the RISE computers Car sales to in corporate Italy rose cus- 0.9 “We’ve been in the post-PC era for Today, however, a number of fac- plant would requireAMERICAS an initial investment of $1.5 Russian oil company operator of 1,675 pubs in sector“IfI.B.M. I.B.M. mayIN beis MILLIONS getting an7.6 irreversible out of SHAREthe6.0 transi- busi- corporate world,” said Terry Gar- ter last year. The gain waslikely the“The sixth to ThinkPad be consecutive $1 billion isn’t to just $2 percent billion. theBurtonwood best Ain Novembertomers after as companiesthe business enticed unit is sold.buy- four years now,” Mr. Schwartz said, torsSource: ranging IDC from the explosive billion. The agreement makes ThyssenKrupp the Yukosmachine has beenfor the searched price,” said Richard Britain, agreed to buy nesstion from because a world it can’t where make corporate money, nett, a venture capitalist who is a buyer would be purchasingers the580 with blue-pence discounts per shareMr. and Dougherty new models. said Sales he wasof al- notingFujitsuDell that last23.05.1 year a billion18.34.1 wire-% growth of the Internet to increased BRAZIL:latest of VENTUREa growing PLANS number STEEL of international MILL A Brazilian steel quarterly gain and wasby higher law than enforcement analysts offi-had Burtonwood for £119 Fiat mil- thenworkplaces investors have will personal ask themselves, comput- partner at Garnett & Helfrich Capi- Dougherty,prints to the directorThinkPad, of generally the Envisio- re- ready hearing from I.B.M. custom- less handsets were sold compared computer and data security con- miningcompanies company, that intendCompanhia to build Vale blast do Rio furnaces Doce, expected, relieving concerncers thatfrom revised the western statistics Si- fell 2 percent, while560 demand surged for cars from ‘WhatersToshiba onH.P. each does desktop I.B.M.19.84.2 to know one where that15.73.4 H.P.cor- tal, based in Menlo Park,The Calif.New York “This Times neeringgarded as Group, the world’s a market most research reliable ers frettinglion about ($231 a sale million) to a compa- to ac- with 100 million personal computers. cerns are shifting the equation. Man- andalong the Brazil’s German coast. steel maker ThyssenKruppTodd Benson (NYT) Stahl due next week would show a contraction in the Hyundai Motor. The Fiat market share declined doesn’tporate know?’”offices run said on Andrew centralized Neff, is a paradigm for the future and a berianfirmand secure city in Seaford, oflaptops. Nefteyu- L.I. “It is the ma- ny that hascelerate specialized earnings in low-price growth But Duane Zitzner, the executive aging viruses and worms is easier on signed an agreement to build a steel slab plant in country’s gross domestic product. (Reuters) to480 27.5 percent from 28.6 percent a year ago. Italy ancomputer analystAcerI.B.M. systemswith4.2 7.6Bear with Stearns. simple 3.46.0 moni- signalmost ofof thosewhere buyersthings are being going.” custom- CANADA: JOBLESS RATE RISES Canada’s unem- gansk,chine“The a forcompany ThinkPad anyone official concerned isn’t just about the best se- machines. as “Customers Britons spend are less saying, time vice president in charge of Hewlett’s centralized systems, and software the state of Rio de Janeiro, Rio Doce said. The is the biggest market for Fiat, accounting for 40 torsAnd on even desks for known I.B.M., as backing “thin clients” away ersThat who trend also has buy been other reflected equipment in ployment rate unexpectedly rose to a five-month toldcurity.”machine the Interfax for the price,” news said Richard ‘Oh my God,and we money need toin bepubs. assured Wol- personal computer business, notes development is increasingly shifting plant, which is expected to be ready by 2008, will percent of the group’s auto sales. fromthatN.E.C.Fujitsu have traditional network3.55.1 personal connections. computers2.84.1 recentand services analyst from reports. I.B.M. On Thursday, high of 7.3 percent in November from 7.1 percent EUROPEagency.Dougherty,A buyer The enforcementwould director presumably of the Envisio- get the we can get verhampton,ThinkPad models which that are is that the sector remains profitable, to While applications Hewlett basedand Dell on are Internet- expect- have an initial production capacity of 4.4 million 380 (Bloomberg News) nowThis may transformation not help, said would Jonathan tend to for example, Rebecca Runkle, an an- the previous month, as employers created the officersThinkPadneering seized Group, namedocuments a and market also research I.B.M.’s just as securebased and in reliable,Wolverhampton, and not withLenovoToshiba Hewlett earning2.94.2 $210 million2.33.4 on based standards. Dell Schwartz,harm Hewlett president more ofthan Sun Dell, Microsys- indus- alysted to atcompete Morgan vigorously Stanley, lowered for I.B.M.’s her tons a year. Rio Doce declined to disclose the val- RUSSIA:from the YUKOS subsidiary, SUBSIDIARY Yuganskneftegas,customerfirm INVESTIGATED in Seaford, list, Interfax A but L.I.Sibe- “Itwhether isBRITAIN: the that ma-F M PUBT just CONCERNW T F a ACQUIRED watered-downEngland, Wolverhampton will offerThinkPad 550 PC’s in the fiscal year that ended in “The days of the $3,000 desktop fewest jobs since August. The economy lost 25,300 Dell Computer accounted for 18 temstry analysts, one of I.B.M.’s said, because top competitors. Hewlett, 2005corporate growth market, forecast there for is evidence PC unit ue of the deal, but local media reports said the reported. Yukos officesrian inwouldchine Moscow subsidiary for be anyone worth and at of muchconcerned other the over about time re-se- brand from&pence Lenovo,’” Dudley a share BreweriesMr. for Dougherty Burton-, an October.Gateway*Acer 2.94.2 2.33.4 personal computer are over in the full-time jobs as factories laid off workers for a percent of PC sales worldwide in like“We’ve I.B.M., been is strongerin the post-PC in the era corpo- for salesthis market by 2 percentage will shrink points, over time. to 9 per- plant would require an initial investment of $1.5 Russianmainscurity.” to oil be seen. company According to peo- said. operator of 1,675 pubs in Moreover, Mr. Zitzner said corporate world,” said Terry Gar- fourth consecutive month, Statistics Canada re- subsidiaries have been raided repeatedly over the wood,Burtonwood an operator of 460 British pubs, the chief ex- fourrateAppleN.E.C. years market now,” than2.53.5 Mr. Dell, Schwartz which1.92.8 said, sells cent.The “thin She client” noted concept that consumer, has been billion. The agreement makes ThyssenKrupp the YukospleA close hasbuyer been to would the searched negotiations, presumablyecutive, a get buyer the Ralphthe Findlay,While third Hewlett quarterBritain, said. Wolverhampton and of agreed 2004.Dell may to bene- also buy I.B.M.’s retreat provides a golden op- nett,debated a venture in the capitalist industry forwho more is a ported.Keith Bradsher Part-time contributedpositions rose report- by 30,000, leaving last year in connection with federal prosecutors’ 580 pence per share notingthe bulk that of its last computers year a billion to consum- wire- small-business and government latest of a growing number of international steel by isThinkPad law also enforcement likely name to get and offi-the use also of I.B.M.’s fit from thatBurtonwood uncertainty, for they £119 may mil- portunity for his company. “Any partnerthan a decade. at Garnett In the & past, Helfrich skeptics Capi- of abouting from 4,600 Hong new Kong jobs for in this November. article. The figures investigation into government claims for more posted results, reporting that full-year profit roseDell lessers.*Includes Lenovo handsets I.B.M.’s sales potential2.9 were of eMachines, sold withdrawal compared2.3 markets all slowed late this year. companies that intend to build blast furnaces cersbrandcustomer from name the western list, on PC’s but Si- for whether a transition- that 560 lion ($231 million) to ac- time there’s a change like this, it tal, based in Menlo Park, Calif. “This may increase expectations that the Bank of Cana- than $24 billion in back taxes owed by the oil gi- 26 percent, tonot £48.4 necessarily million. benefit over the long withfromwhich 100 the million Gatewaydesktop personal computerbought computers.in the business thatIn concept May, I.B.M. pointed began to the offeringPC’s flexi- a along Brazil’s coast. Todd Benson (NYT) alwould period be and worth I.B.M. much may over continue time re-to Dell Computer accounted for 18 addsGateway* a level of2.9 uncertainty 2.3 among is a paradigm for the future and a da will leave interest rates unchanged at its poli- ant. Russian Presidentberian Vladimir city V. of Putin, Nefteyu- on a term. I.B.M.’scelerate retreat(Bloomberg earnings from growththeNews) PC indicatesButfirst Duane quarter. it Zitzner, has concluded the executive that thinbility andsoftware convenience, application as well called as to WORLD BUSINESSsellmains the BRIEFING tocomputers be seen. According to corporate480 to cus- peo- percent of PC sales worldwide in customers buying equipment,” he signal of where things are going.” CANADA:cy meeting JOBLESS next week. RATE RISES(Bloomberg Canada’s News) unem- three-day visit to India,gansk, said the a company Russian govern-official sector mayas be Britons an irreversible spend less transi- time vicegrowth president in corporate in charge PC of Hewlett’s sales is Workplacethe problems — based with mainframeon the Java com-pro- tomersple close after to the the negotiations, business unitFINLAND: a is buyer sold. DEPARTURESthe third quarter AT NOKIA of Two2004. executives said.Source:Apple IDC 2.5 1.9 That trend has been reflected in ployment rate unexpectedly rose to a five-month told the Interfax news tion from and a world money where in pubs. corporate Wol- personallargely over. computer business, notes grammingputing. language —intended for ment would welcome a bidis by Mr.also companies likely Dougherty to inget India the said use he ofin was I.B.M.’scharge al- of the networks division at Nokia, the gi- Dell accounted for 18 percent of recent analyst reports. On Thursday, high of 7.3 percent in November from 7.1 percent cent in the July-Septemberagency. period The from enforcement the quar- ITALY: CAR SALESworkplaces RISE verhampton,Car have sales personal in Italy which comput-rose 0.9 is that“If*Includes theI.B.M. sector is sales getting remains of eMachines, out of profitable, the busi- Web-basedToday, however, computing a number where dataof fac- is AMERICASASIA to buy assets of Yuganskneftegas.readybrand name hearing A 77on percent fromPC’s for I.B.M. a transition-ant 380 custom- mobile phone maker, are leaving the compa- PC sales — includingThe New laptops York Times — for example, Rebecca Runkle, an an- the previous month, as employers created the ter last year. The gain officerswas the seizedsixth consecutivedocuments percent in Novemberersnot onnecessarily each asbased desktop companies benefit in to Wolverhampton, one overenticed where the buy-longcor- withnesswhich Hewlett because Gateway earning it can’t bought $210 make in million the money, on managedtors ranging and stored from centrally. the explosive stake in the subsidiary is toersal beperiod fretting auctioned and about I.B.M. on aDec. salemay to continue nya compa- for personalto reasons, the company said. Sari worldwide in the third quarter of alyst at Morgan Stanley, lowered her fewestBRAZIL: jobs VENTURE since August. PLANS TheSTEEL economy MILL A lost Brazilian 25,300 fromquarterly the subsidiary,gain and was Yuganskneftegas, higher than analysts Interfax had ers withF M discountsT porateterm.W T Fand I.B.M.’s offices England,new retreatmodels. run will on fromSales centralized offer theof Fiat 550 PC PC’sthenfirst in investors quarter.the fiscal will year ask that themselves, ended in growthI.B.M. ofis thebetting Internet that such to increased systems JAPAN: CAPITAL SPENDING RISES Spending on 19 to help Yukos pay backnysell taxes. that the computers has The specialized Indian to oil corporate in Baldauf, low-price cus- the head of Nokia’s networks division, 2004,most accordingof those buyers to I.D.C., being compared custom- 2005 growth forecast for PC unit full-timemining company, jobs as factories Companhia laid Vale off workers do Rio Doce for a, reported.expected, Yukosrelieving offices concern in Moscowthat revised and statistics at other fell 2 percent,computersector while maydemand systemspence be an surged a irreversible withshare forsimple for cars Burton- transi- moni- from October.‘What does I.B.M. know that H.P. willcomputer be increasingly and data attractive security to con-cor- plant and equipment by Japanese companies in- minister, Mani Shankar Aiyar,machines.tomers above, after “Customers the said business Mr. are unitwill saying,is leavesold. nexttors month on desks and known J. T. as Bergqvist, “thin clients” the withers Source: who Hewlett’s IDC also buy 16.1 other percent equipment market salescerns by are 2 percentage shifting the points,equation. to 9 Man- per- fourthand the consecutive German steel month, maker Statistics ThyssenKrupp Canada Stahl re- subsidiariesdue next week have would been showraided a repeatedly contraction over in the wood,Hyundai an operatorMotortion. The fromof 460 Fiat aBritish world market pubs, where share the corporate chiefdeclined ex- doesn’tMoreover, know?’” Mr. said Zitzner Andrew Neff, said porate customers and will conse- creased in the third quarter, a government sur- Putin “welcomed bids by Indian‘OhMr. my firms, Dougherty God, weeither need said on to he behead assuredwas of al- the that global have business network units connections. of Nokia net- share.and services I.B.M. from was I.B.M. a distant third at cent.aging viruses She noted and worms that is consumer, easier on ported.signed anPart-time agreement positions to build rose a steelby 30,000, slab plantleaving in lastcountry’s year ingross connection domestic with product.we federal can get prosecutors’ThinkPad(Reuters) modelsecutive,to that 27.5 are percent Ralphworkplaces Findlay,from 28.6 said. percent have Wolverhampton personal a year ago. comput- Italy also I.B.M.’sanWhile analyst retreatHewlett with Bearprovides and DellStearns. a are golden expect- op- quently diminish the once mighty vey showed. A quarterly survey by the Ministry their own or in collaborationready with hearingRussian fromfirms,” I.B.M.works, custom- will resignThis on transformation Jan. 31. would tend(AP) to 5.2 percent. I.B.M.’s salesThe Neware York almost Times small-businesscentralized systems, and and government software the state of Rio de Janeiro, Rio Doce said. The postedis the biggestresults,ers marketreporting on each for desktopthat Fiat, full-year accounting to one profitwhere for rose cor- 40 portunityAnd even for for hisI.B.M., company. backing away “Any personal computer business. aboutof Finance 4,600 showed new jobs capital in November. spending rose The 14.4 figures per- investigationReuters reported. into governmentErinjusters E. fretting asArvedlund claims secure about for and (NYT) more a reliable,sale to a andcompa- not exclusivelyed to compete to corporatevigorously buyers, for I.B.M.’s with marketsdevelopment all slowed is increasingly late this year. shifting percent of theharmporate group’s Hewlett offices auto sales.more run than on Dell, centralized indus- timefrom traditional there’s a changepersonal like computers this, it mayplant, increase which is expectations expected to thatbe ready the Bank by 2008, of Cana- will than $24 billion in back taxesjustny that owed a has by watered-down specializedthe oil gi- in ThinkPad26 low-price percent, to £48.4 million. corporatemost of those market, buyers there being is evidence custom- In May, I.B.M. began offering a EUROPE trycomputer analysts systems said, with because simple Hewlett, moni- addsnow maya level not of help, uncertainty said Jonathan among to applications based on Internet- dahave will an leave initial interest production rates capacityunchanged of 4.4at itsmillion poli- ant. Russian President Vladimirbrandmachines. from V. Putin, “CustomersLenovo,’” on a Mr. are Dougherty saying, (Bloomberg News) thisers market who also will buy shrink other over equipment time. thin software application called liketors I.B.M., on desks is known stronger as “thin in the clients” corpo- customersSchwartz, president buying of equipment,” Sun Microsys- he based standards. cytons meeting a year. next Rio week.Doce declined(Bloomberg to disclose the News) val- three-dayRUSSIA: YUKOS visit toSUBSIDIARY India, saidsaid.‘Oh INVESTIGATED the my Russian God, we govern- A needSibe- to beFINLAND:BRITAIN: assured PUB DEPARTURES CONCERN ACQUIREDAT NOKIA TwoWolverhampton executives andThe services “thin client” from I.B.M. concept has been Workplace — based on the Java pro- ratethat have market network than connections. Dell, which sells said.tems, one of I.B.M.’s top competitors. “The days of the $3,000 desktop Keith Bradsher contributed report- ue of the deal, but local media reports said the ment would welcome a rianbidwe by While subsidiarycancompanies get Hewlett ThinkPad in of and India the modelsDell may that bene- are & Dudley Breweries, an debatedWhile Hewlett in the and industry Dell are for expect- more gramming language —intended for in charge of thetheThis networks bulk transformation of its division computers at wouldNokia to consum- , tendthe gi- to Dell“We’ve accounted been in the for post-PC 18 percent era for of personal computer are over in the ing from Hong Kong for this article. plant would require an initial investment of $1.5 to buy assets of Yuganskneftegas.Russianfitjust from as secure oil that A 77 uncertainty,company percent and reliable, they and may not operator of 1,675 pubs in thaned to a compete decade. vigorouslyIn the past, for skeptics I.B.M.’s of Web-based computing where data is ASIA ant mobile phoneers.harm I.B.M.’smaker, Hewlett are more potential leaving than withdrawaltheDell, compa- indus- PCfour salesyears —now,” including Mr. Schwartz laptops said, — corporate world,” said Terry Gar- billion. The agreement makes ThyssenKrupp the just a watered-down ThinkPadBurtonwood thatcorporate concept market, pointed there to the is PC’s evidence flexi- managed and stored centrally. stake in the subsidiary Yukosis to be has auctioned been searched on Dec. ny for personalfromtry reasons, analysts the desktopBritain, the said, company computer because agreed said. business Hewlett, to Sari buy worldwidenoting that in last the year third a billion quarter wire- of nett, a venture capitalist who is a latest of a growing number of international steel brand from Lenovo,’” Mr. Dougherty580 pence per share bilitythis market and convenience, will shrink overas well time. as to I.B.M. is betting that such systems JAPAN: CAPITAL SPENDING RISES Spending on 19 to help Yukos pay backby law taxes. enforcement The Indian offi- oil Baldauf, the indicateslike head I.B.M., of Nokia’sBurtonwood it is stronger has networks concluded for in the £119 division, corpo- thatmil- 2004,less handsets according were to I.D.C., sold compared partner at Garnett & Helfrich Capi- WORLD BUSINESS BRIEFING said. 560 theThe problems “thin client” with mainframeconcept has com-been will be increasingly attractive to cor- plantcompanies and equipment that intend by Japanese to build blastcompanies furnaces in- minister, Mani Shankarcers Aiyar, from above, the western said Mr. Si- will leave nextgrowthrate month market in lion and corporate than ($231 J. T. Dell, million)Bergqvist, PC which sales to sells the ac- is with 100 Hewlett’s million 16.1personal percent computers. market tal, based in Menlo Park, Calif. “This While Hewlett and Dell may bene- puting.debated in the industry for more porate customers and will conse- Keith Bradsher contributed report- creasedalong Brazil’s in the coast. third quarter,Todd a government Benson (NYT) sur- Putin “welcomed bids byberian Indian city firms, of either Nefteyu- on head of the largelythe global bulk businessover. ofcelerate its computers units earnings of Nokiato consum- growth net- share.But DuaneI.B.M. was Zitzner, a distant the executive third at is a paradigm for the future and a cent in the July-September period from the quar- ITALY: CAR SALESfit from RISE that Car uncertainty,sales in Italy they 480rose may 0.9 thanToday, a decade. however, In the a past,number skeptics of fac- of quentlysignal of diminishwhere things the are once going.” mighty ing from Hong KongAMERICAS for this article. veyCANADA: showed. JOBLESS A quarterly RATE RISESsurvey Canada’s by the Ministry unem- their own or in collaborationgansk, with a company Russian firms,”official works, will resigners.“If onI.B.M. I.B.M.’s Jan.as is 31. Britons getting potential spend out withdrawalof lessthe (AP) busi-time 5.2vice percent. president I.B.M.’s in charge sales of are Hewlett’s almost ter last year. The gain was the sixth consecutive percent in November as companies enticed buy- torsthat concept ranging pointed from to the the PC’s explosive flexi- personal computer business. ofployment Finance rate showed unexpectedly capital spending rose to rosea five-month 14.4 per- Reuters reported. toldErin E. the Arvedlund Interfax (NYT) news nessfrom becausethe desktopand it money can’t computer make in pubs. business money, Wol- exclusivelypersonal computer to corporate business, buyers, noteswith That trend has been reflected in BRAZIL: VENTURE PLANS STEEL MILL A Brazilian quarterly gain and was higher than analysts had ers with discounts and new models. Sales of Fiat growthbility and of convenience, the Internet toas increasedwell as to recent analyst reports. On Thursday, high of 7.3 percent in November from 7.1 percent agency. The enforcement thenindicates investors verhampton, it has will ask concluded themselves, which that is that the sector remains profitable, mining company, Companhia Vale do Rio Doce, expected,WORLD relieving BUSINESS concern that revisedBRIEFING statistics fell 2 percent, while demand surged for cars380 from ‘What does I.B.M. know that H.P. computerthe problems and with data mainframe security com- con- for example, Rebecca Runkle, an an- the previous month, as employers created the officers seized documents growth inbased corporate in Wolverhampton, PC sales is with Hewlett earning $210 million on and the German steel maker ThyssenKrupp Stahl due next week would show a contraction in the Hyundai Motor. The Fiat market share declined doesn’t know?’” said Andrew Neff, cernsputing. are shifting the equation. Man- alyst at Morgan Stanley, lowered her fewest jobs since August. The economy lost 25,300 from the subsidiary, Yuganskneftegas, Interfax F M T largelyW T F over.England, will offer 550 PC’s in the fiscal year that ended in cent in the July-September period from the quar- toITALY: 27.5 percentCAR SALES from RISE 28.6 Car percent sales ain year Italy ago. rose Italy 0.9 agingToday, viruses however, and worms a number is easier of fac- on 2005 growth forecast for PC unit signed an agreementAMERICAS to build a steel slab plant in country’s gross domestic product. (Reuters) an“If analyst I.B.M. with is getting Bear Stearns. out of the busi- October. full-time jobs as factories laid off workers for a reported. Yukos offices in Moscow and at other pence a share for Burton- centralizedtors ranging systems, from the and explosive software the state of Rio de Janeiro, Rio Doce said. The ter last year. The gain was the sixth consecutive ispercent the biggest in November market foras companiesFiat, accounting enticed for buy- 40 nessAnd because even for it I.B.M., can’t backing make money, away Moreover, Mr. Zitzner said sales by 2 percentage points, to 9 per- fourth consecutive month, Statistics Canada re- subsidiaries have been raided repeatedly over the wood, an operator of 460 British pubs, the chief ex- developmentgrowth of the is Internetincreasingly to increased shifting plant,BRAZIL: which VENTURE is expected PLANS toSTEEL be ready MILL byA Brazilian2008, will quarterly gain and was higher than analysts had percenters with of discounts the group’s and auto new sales. models. Sales of Fiat fromthen traditional investors will personal ask themselves, computers I.B.M.’s retreat provides a golden op- cent. She noted that consumer, ported. Part-time positions rose byEUROPE 30,000, leaving last year in connection with federal prosecutors’ ecutive, Ralph Findlay, said. Wolverhampton also tocomputer applications and databased security on Internet- con- havemining an company,initial production Companhia capacity Vale of do 4.4 Rio million Doce, expected, relieving concern that revised statistics fell 2 percent, while demand surged(Bloomberg for cars News) from now‘What may does not I.B.M. help, know said thatJonathan H.P. portunity for his company. “Any small-business and government about 4,600 new jobs in November. The figures investigation into government claims for more posted results, reporting that full-year profit rose basedcerns standards.are shifting the equation. Man- markets all slowed late this year. tonsand thea year. German Rio Doce steel declinedmaker ThyssenKrupp to disclose the Stahl val- RUSSIA:due next YUKOS week SUBSIDIARY would show INVESTIGATED a contraction A inSibe- the Hyundai Motor. The Fiat market share declined Schwartz,doesn’t know?’” president said of Sun Andrew Microsys- Neff, time there’s a change like this, it may increase expectations that the Bank of Cana- than $24 billionBRITAIN: in back PUB taxes CONCERN owed byACQUIRED the oil gi-Wolverhampton26 percent, to £48.4 million. aging“The viruses days and of the worms $3,000 is easier desktop on uesigned of the an deal,agreement but local to build media a steel reports slab saidplant the in country’s gross domesticrian product. subsidiary (Reuters) of the to 27.5 percent from 28.6 percent a year ago. Italy temsan analyst, one of with I.B.M.’s Bear top Stearns. competitors. adds a level of uncertainty among In May, I.B.M. began offering a da will leave interest rates unchanged at its poli- ant. Russian President Vladimir V. & Putin, Dudley on aBreweries, an (Bloomberg News) personalcentralized computer systems, are and over software in the plantthe state would of require Rio de Janeiro,an initial Rio investment Doce said. of $1.5The is the biggest market for Fiat, accounting for 40 “We’veAnd even been for in I.B.M., the post-PC backing era away for customers buying equipment,” he thin software application called Russian oil company operator of 1,675 pubs in corporatedevelopment world,” is increasingly said Terry shifting Gar- cy meeting next week. (Bloomberg News) three-day visitpercent Burtonwoodto India, of thesaid group’s the Russian auto sales. govern- FINLAND: DEPARTURESfourfrom years traditional ATnow,” NOKIA personal Mr. Two Schwartz executivescomputers said, said. Workplace — based on the Java pro- 2 billion.plant, which The agreement is expected makes to be readyThyssenKrupp by 2008, willthe EUROPEYukos has been searched Britain, agreed to buy nett,to applications a venture capitalist based on who Internet- is a ment would welcome580 pence a bid per byshare companies in (BloombergIndia in charge News) of thenotingnow networks may that not last division help, year at saida Nokia billion Jonathan, the wire- gi- Dell accounted for 18 percent of gramming language —intended for latesthave anof ainitial growing production number capacity of international of 4.4 million steel by law enforcement offi- Burtonwood for £119 mil- partnerbased standards. at Garnett & Helfrich Capi- Web-based computing where data is to buy assets of Yuganskneftegas.560 A 77 percent ant mobile phonelessSchwartz, handsetsmaker, president are were leaving of sold Sun the comparedMicrosys- compa- PC sales — including laptops — companiestons a year. thatRio Doce intend declined to build to disclose blast furnaces the val- RUSSIA: ASIAYUKOS SUBSIDIARYcers INVESTIGATEDfrom the western A Sibe- Si- BRITAIN: PUB CONCERN ACQUIREDlion ($231 Wolverhampton million) to ac- tal,“The based days in Menlo of the Park, $3,000 Calif. desktop “This stake in the subsidiary is to be auctioned on Dec. ny for personalwithtems reasons, 100, one million of I.B.M.’s the personal company top competitors. computers. said. Sari worldwide in the third quarter of managed and stored centrally. alongue of Brazil’s the deal, coast. but local mediaTodd reports Benson said (NYT) the berianrian subsidiary city of Nefteyu- of the celerate& Dudley earnings Breweries growth, an ispersonal a paradigm computer for the are future over inand the a JAPAN: CAPITAL SPENDING RISES Spending on 19 to help Yukos480 pay back taxes. The Indian oil Baldauf, the headBut“We’ve Duaneof Nokia’sbeen Zitzner, in the networks post-PC the executive division, era for 2004, according to I.D.C., compared I.B.M. is betting that such systems plant would require an initial investment of $1.5 gansk,Russian a company oil company official asoperator Britons of spend 1,675 less pubs time in signalcorporate of where world,” things said are Terry going.” Gar- CANADA: JOBLESS RATE RISES Canada’splant unem- and equipment by Japanese companies in- minister, Mani Burtonwood Shankar Aiyar, above, said Mr. will leave nextvicefour month presidentyears now,” and in J.charge Mr. T. Bergqvist,Schwartz of Hewlett’s said, the with Hewlett’s 16.1 percent market will be increasingly attractive to cor- ploymentbillion. The rate agreement unexpectedly makes rose ThyssenKrupp to a five-month the toldYukos the has Interfax been searched news andBritain, money agreed in pubs. to Wol- buy personal computer business, notes nett,That a trendventure has capitalist been reflected who is in a porate customers and will conse- creased in the third quarter, a government sur- Putin “welcomed580 bids pence by per Indian share firms, either on head of the noting global thatbusiness last yearunits a of billion Nokia wire- net- recentshare. analyst I.B.M. was reports. a distant On Thursday, third at highlatest of of 7.3 a percentgrowing in number November of international from 7.1 percent steel agency.by law enforcementThe enforcement offi- verhampton,Burtonwood for which £119 mil- is that the sector remains profitable, partner at Garnett & Helfrich Capi- quently diminish the once mighty vey showed. A quarterly survey by the Ministry their own or in collaboration380 560with Russian firms,” works, will resignless handsetson Jan. 31. were sold compared(AP) for5.2 percent.example, I.B.M.’s Rebecca sales Runkle, are almost an an- thecompanies previous that month, intend as to employers build blast created furnaces the officerscers from seized the westerndocuments Si- basedlion ($231 in Wolverhampton, million) to ac- with Hewlett earning $210 million on tal, based in Menlo Park, Calif. “This personal computer business. of Finance showed capital spending rose 14.4 per- Reuters reported. Erin E. Arvedlund (NYT) with 100 million personal computers. alystexclusively at Morgan to corporate Stanley, buyers,lowered with her fewestalong Brazil’s jobs since coast. August. TheTodd economy Benson lost (NYT) 25,300 from the subsidiary, Yuganskneftegas,berian city of Nefteyu-Interfax F M T W T F England,celerate earnings will offer growth 550 PC’s in the fiscal year that ended in is a paradigm for the future and a 480 But Duane Zitzner, the executive 2005 growth forecast for PC unit reported. Yukos officesgansk, in Moscow a company and at official other penceas Britons a share spend for less Burton- time October. signal of where things are going.” full-timeCANADA: jobs JOBLESS as factories RATE RISES laid offCanada’s workers unem- for a vice president in charge of Hewlett’s sales by 2 percentage points, to 9 per- fourthployment consecutive rate unexpectedly month, Statistics rose to a Canadafive-month re- subsidiaries have been raidedtold the repeatedly Interfax over news the wood, an operator of 460and British money pubs, in the pubs. chief Wol- ex- personalMoreover, computer Mr. business, Zitzner notes said That trend has been reflected in cent.recent Sheanalyst noted reports. that On consumer,Thursday, ported.high of Part-time7.3 percent positions in November rose by from 30,000, 7.1 percentleaving last year in connection agency.with federal The enforcementprosecutors’ ecutive, Ralph Findlay, verhampton,said. Wolverhampton which also is I.B.M.’sthat the retreat sector provides remains a profitable,golden op- 380 small-businessfor example, Rebecca and Runkle, government an an- aboutthe previous 4,600 new month, jobs asin November. employers Thecreated figures the investigation into governmentofficers seized claims documents for more posted results, reportingbased that full-year in Wolverhampton, profit rose portunitywith Hewlett for earning his company. $210 million “Any on time there’s a change like this, it marketsalyst at Morgan all slowed Stanley, late this lowered year. her mayfewest increase jobs since expectations August. The that economy the Bank lost of Cana-25,300 thanfrom $24 the billion subsidiary, in back Yuganskneftegas, taxes owed by the Interfax oil gi- 26 percent,F M T to W£48.4T Fmillion.England, will offer 550 PC’s in the fiscal year that ended in adds a level of uncertainty among 2005In May, growth I.B.M. forecast began for offering PC unit a dafull-time will leave jobs interest as factories rates laidunchanged off workers at its forpoli- a ant.reported. Russian Yukos President offices Vladimir in Moscow V. and Putin, at other on a pence a(Bloomberg share for Burton- News) October. thin software application called customersMoreover, buying Mr. equipment,” Zitzner said he sales by 2 percentage points, to 9 per- cyfourth meeting consecutive next week. month, Statistics(Bloomberg Canada News) re- three-daysubsidiaries visit have to India,been raided said the repeatedly Russian overgovern- the FINLAND:wood, an operatorDEPARTURES of 460 AT British NOKIA pubs, Two the executives chief ex- Workplace — based on the Java pro- said.I.B.M.’s retreat provides a golden op- cent. She noted that consumer, ported. Part-time positions rose by 30,000, leaving mentlast year would in welcomeconnection a bidwith by federal companies prosecutors’ in India inecutive, charge Ralph of the Findlay, networks said. division Wolverhampton at Nokia, the also gi- gramming language —intended for portunityDell accounted for his for company. 18 percent “Any of small-business and government about 4,600 new jobs in November. The figures toinvestigation buy assets into of Yuganskneftegas. government claims A 77 for percent more antposted mobile results, phone reporting maker, thatare full-yearleaving the profit compa- rose Web-based computing where data is ASIA PCtime sales there’s — a including change like laptops this, — it markets all slowed late this year. may increase expectations that the Bank of Cana- stakethan $24in the billion subsidiary in back is taxes to be owed auctioned by the on oil Dec. gi- 26 percent, to £48.4 million. managed and stored centrally. ny for personal reasons, the company said. Sari worldwideadds a level in of the uncertainty third quarter among of In May, I.B.M. began offering a JAPAN:da will leave CAPITAL interest SPENDING rates unchanged RISES Spending at its poli- on 19ant. to Russian help Yukos President pay back Vladimir taxes. V.The Putin, Indian on oil a Baldauf, the head of Nokia’s (Bloomberg networks division, News) 2004, according to I.D.C., compared thinI.B.M. software is betting application that such systems called customers buying equipment,” he will be increasingly attractive to cor- plantcy meeting and equipment next week. by Japanese(Bloomberg companies News) in- minister,three-day Manivisit to Shankar India, said Aiyar, the above,Russian said govern- Mr. willFINLAND: leave DEPARTURES next month AT and NOKIA J. T. Two Bergqvist, executives the withsaid. Hewlett’s 16.1 percent market Workplace — based on the Java pro- creased in the third quarter, a government sur- Putinment would“welcomed welcome bids a by bid Indian by companies firms, either in India on headin charge of the of the global networks business division units at of Nokia Nokia, the net- gi- share. I.B.M. was a distant third at porategramming customers language and —intended will conse- for Dell accounted for 18 percent of quently diminish the once mighty vey showed. A quarterly survey by the Ministry theirto buy own assets or in ofcollaboration Yuganskneftegas. with Russian A 77 percentfirms,” works,ant mobile will resignphone onmaker, Jan. 31. are leaving the compa-(AP) 5.2 percent. I.B.M.’s sales are almost Web-based computing where data is ASIA PC sales — including laptops — personal computer business. of Finance showed capital spending rose 14.4 per- Reutersstake in reported.the subsidiary Erinis to beE. Arvedlundauctioned on(NYT) Dec. ny for personal reasons, the company said. Sari exclusivelyworldwide to in corporate the third buyers, quarter with of managed and stored centrally. JAPAN: CAPITAL SPENDING RISES Spending on 19 to help Yukos pay back taxes. The Indian oil Baldauf, the head of Nokia’s networks division, 2004, according to I.D.C., compared I.B.M. is betting that such systems plant and equipment by Japanese companies in- minister, Mani Shankar Aiyar, above, said Mr. will leave next month and J. T. Bergqvist, the with Hewlett’s 16.1 percent market will be increasingly attractive to cor- creased in the third quarter, a government sur- Putin “welcomed bids by Indian firms, either on head of the global business units of Nokia net- share. I.B.M. was a distant third at porate customers and will conse- quently diminish the once mighty vey showed. A quarterly survey by the Ministry their own or in collaboration with Russian firms,” works, will resign on Jan. 31. (AP) 5.2 percent. I.B.M.’s sales are almost personal computer business. of Finance showed capital spending rose 14.4 per- Reuters reported. Erin E. Arvedlund (NYT) exclusively to corporate buyers, with C M Y ID NAME: Nxxx,2004-12-08,A,001,Bs-BK,E3 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

C M Y ID NAME: Nxxx,2004-12-08,A,001,Bs-BK,E3 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

NEW YORK, WEDNESDAY, DECEMBER 8, 2004

Sale of I.B.M. PC Unit Is a Bridge Between Companies and Cultures

By STEVE LOHR I.B.M. announced late yesterday ported late last week that I.B.M. had the sale of its personal computer put its PC business up for sale — business to Lenovo, China’s largest points to the rising global aspirations personal computer maker, a deal of corporate China as it strives to be- that reflects the industrial and eco- come a trusted supplier to Western nomic ambitions of not only the two companies and consumers. The sale companies but also their two nations. also signals a recognition by I.B.M., Under Lenovo’s ownership, the the prototypical American multina- I.B.M. personal computer business tional, that its own future lies even will continue to be based in the Unit- farther up the economic ladder, in ed States and run by its current man- technology services and consulting, agement team. I.B.M. will take a in software and in the larger comput- stake of 18.9 percent in Lenovo, ers that power corporate networks which is based in Beijing but plans to and the Internet. All are businesses have headquarters in New York. far more profitable for I.B.M. than The significance of the deal may its personal computer unit. exceed the relatively modest amount But the move signals an acknowl- that Lenovo is paying: a total of $1.75 edgment by I.B.M. that its future in billion in cash, stock and debt. China may be best served by a close The transaction — The Times re- partnership with a local market lead- er — particularly one, as in Lenovo’s case, that is partly owned by the Chi- nese government. The chief execu- tive of Lenovo will be Stephen M. Ward Jr., currently an I.B.M. senior vice president in charge of the PC business. Lenovo’s current chief and president, Yang Yuanqing, will be- come Lenovo’s chairman. American companies, in one indus- try after another, are scrambling to take advantage of the vast potential of the Chinese market. Chinese com- panies like Lenovo, meanwhile, are increasingly seeking to tap into over-

Continued on Page C4

FOR HOME DELIVERY CALL 1-800-NYTIMES

0 3 5 4 6 1 3 9 5 0 3 0 4

FOR HOME DELIVERY CALL 1-800-NYTIMES

0 3 5 4 6 1 3 9 5 0 3 0 4 ID NAME: Nxxx,2004-12-08,C,004,Bs-BW,E2 3 7 15 25 50 75 85 93 97

COMPANY NEWS TECHNOLOGY ...... I.B.M. Sale: Bridge Between Companies and Cultures tegically,” said A. M. Sacconaghi, an Continued From Page A1 analyst at Sanford C. Bernstein & Company. “Palmisano has decided seas markets, management exper- to focus instead on businesses that tise and technological skills. are more profitable for I.B.M. and “This is an encouraging sign of the promise higher growth.” increasingly sophisticated trans-Pa- In a statement, Mr. Palmisano cific ties between the United States said the PC industry “continues to and China,” said Timothy F. Bresna- take on the characteristics of the han, an economist at Stanford Uni- home and consumer electronics in- versity. “Seeing the Chinese seeking dustry which favors enormous econ- these kinds of economic links can omies of scale and a focus on individ- only be a good thing.” ual users and buyers,” while I.B.M. The complex transaction is meant will focus more on the corporate to serve as a bridge between very market. different companies from different Still, industry analysts say, it is not cultures, by seeking to ensure that clear that a business that was strug- I.B.M. has a stake in the Chinese gling under I.B.M. will thrive under company’s success. Whether in the Lenovo. Worldwide growth in PC United States, in China or anywhere sales, according to Gartner, a re- else in the world, such a stake would search firm, will slow to about 2 per- be in I.B.M.’s self-interest; a messy cent a year from 2006 to 2008, less than half the projected revenue gains exit from the personal computer in- Bruce R. Feeley for The New York Times dustry could rankle corporate cus- of 4.7 percent a year from 2003 to The senior management of the current I.B.M. personal computer busi- 2005. The number of PC makers, ana- tomers, hurting I.B.M.’s other busi- ness, led by Stephen M. Ward Jr. and Fran O’Sullivan, will join Lenovo. nesses, and tarnish its stellar brand lysts say, will probably be winnowed name. in the next few years. I.B.M. has agreed to hold onto its employs about 10,000 people world- personal computer sales are about “Lenovo aspires to become a ma- stake in Lenovo for three years, the wide in its PC business, although $10 billion a year, or about 11 percent jor international player and a recog- companies said, with an option of ex- fewer than a quarter of those work- of its $89 billion in revenue, but it has nized brand, a company with the tending it. I.B.M.’s financial commit- ers are in the United States. In fact, hovered between slight profits and ability to sell into multinational cor- ment to Lenovo could help open 40 percent already work in China. losses in recent years. porations and be profitable,” said doors for its efforts to win other busi- Under the agreement, I.B.M. will In its hasty entry into the PC busi- Leslie Fiering, an analyst for Gart- ness in China. continue to handle technical support, ness in the early 1980’s, I.B.M. made ner. “This deal improves its chances, but the business is only going to get The senior management of the financing and warranty coverage what turned out to be a strategic mis- tougher over the next few years.” current I.B.M. personal computer globally for its former personal com- take: it chose outside suppliers for The personal computer industry, business will join the Chinese compa- puter division. Those tend to be the crucial technologies of the micro- like most technology businesses, is ny, led by Mr. Ward and Fran O’Sul- steady and profitable cash-generat- processor and the software operat- not one in which low labor costs — livan, the general manager of ing businesses, even as the PC busi- ing system, helping Intel and Micro- one of China’s advantages in compet- I.B.M.’s personal computer division. ness itself has been only intermit- soft become two of the most profit- ing with Western rivals — are much Besides management expertise, tently profitable for I.B.M. lately. able companies in the world. of an edge. The big winner in the Lenovo would be acquiring five-year It was I.B.M. that moved the per- For nearly a decade, executives business, Dell Computer, is mainly a brand-licensing rights to a computer sonal computer industry from a hob- have debated dropping out of the per- master of ultra-efficient manage- business best known for its I.B.M. byist market into the corporate and sonal computer business. Samuel J. ment of its suppliers, assembly and Thinkpad notebooks, its sleek black consumer mainstream with its first Palmisano, who became I.B.M.’s distribution. desktops and the product line’s dis- PC in 1981. But as the company lost chief executive in 2002, finally made I.B.M.’s rivals said the Lenovo tinctive tricolor I.B.M. logo. its PC market leadership to nimbler the move. He decided that the com- purchase would create uncertainty While Lenovo will have its head- players, the company has pulled pany’s management and investment among customers and provide op- quarters in New York, the hub of the back its commitment to the business, resources would be better used in its portunity for them. “It’s hard to I.B.M. PC business is in Raleigh, first by getting out of retail sales other businesses like software and think back on a successful large N.C., where its design and develop- and, in 2002, passing off its desktop services to help customers use infor- merger in the computer industry, ment operations are based. I.B.M. PC manufacturing to a Silicon Valley mation technology to help automate and I don’t see this one being differ- contractor, Sanmina-SCI. business tasks from product design ent,” Michael S. Dell, chairman of Andrew Ross Sorkin, in New York, Today, I.B.M. is a distant third in to procurement. Dell Computer, said yesterday. “We and Gary Rivlin, in San Francisco, worldwide PC market share, behind “The PC business is just not that like to acquire our competitors one contributed reporting for this article. Dell and Hewlett-Packard. I.B.M.’s important anymore to I.B.M. stra- customer at a time.”

Hewlett Chief Cisco Expects Says a Breakup To Hit Estimate Was Discussed For Revenue

By GARY RIVLIN By MATT RICHTEL

SAN FRANCISCO, Dec. 7 — For at SANTA CLARA, Calif., Dec. 7 — least a year, Wall Street analysts Cisco Systems, the maker of Internet who follow Hewlett-Packard have networking equipment, said on Tues- been calling on its chief executive, day that it was on track to meet Wall Carleton S. Fiorina, to break up the Street’s estimates for 13 percent company. On Tuesday, Ms. Fiorina growth in revenue for fiscal 2005. 2 acknowledged that on three occa- Noah Berger/Bloomberg News Dennis Powell, Cisco’s chief finan- sions the Hewlett board considered Carleton S. Fiorina, chief executive of Hewlett-Packard, made her first cial officer, speaking to a gathering doing just that, but each time the of several hundred analysts, said board unanimously decided to keep public response yesterday to calls for splitting up the company. that Cisco expected revenue to grow the company together. annually on the higher end of the 10 Ms. Fiorina’s admission came profit. that, alternatively, the company percent to 15 percent range through while speaking in Boston at the com- To Hewlett executives, its strong should split off its consumer prod- 2008. Mr. Powell also said that he ex- pany’s twice-a-year meeting for fi- presence in both the consumer and ucts from its business products. pected the company to experience nancial analysts. She did not offer business markets is a critical leg up Until Tuesday, Ms. Fiorina reso- some downward pressure on its any specifics about when those dis- in competition with its many rivals, lutely ignored such calls. gross margins over the next several cussions took place or how diligently including I.B.M. and Dell. The Associated Press quoted Ms. years. the board explored the possibility. “Our corporate customers recog- Fiorina as saying that breaking the Industry analysts, gathered for an Ms. Fiorina’s comments came in nize that our deep understanding of company apart would incur “real annual conference with Cisco execu- response to a question posed by Ste- the consumer side of things is criti- costs” and prove an enormous drain tives, expressed mild surprise at the ven Milunovich, a Merrill Lynch cal to their business,” Shane V. Robi- on executives. company’s willingness to announce technology analyst who has repeat- son, the company’s chief strategy Robert P. Wayman, the company’s its revenue projections. For the last edly called on Hewlett to spin off its and technology officer, said last sum- chief financial officer, said at the several years, since the downturn in printer business. Mr. Milunovich has mer in an interview. same meeting that a breakup would the technology sector, the company published reports asserting that a But Mr. Milunovich and other ana- make no sense because the pieces has declined to give year-end guid- spinoff would provide financial bene- lysts say they believe that the printer would be less efficient than the cur- ance, citing murky economic condi- fits to shareholders. business is so profitable that spin- rent company. Companies save mon- tions. Hewlett-Packard, with a market ning it off as a free-standing compa- ey by sharing the costs of human re- Mr. Powell said that the company capitalization of $63.7 billion, is a hy- ny would be good for investors. sources and other services. was seeing greater optimism among dra-headed behemoth that sells a diz- In a report Mr. Milunovich pub- Indeed, Ms. Fiorina’s rationale for its customers and was responding to zying array of products. That in- lished in June, just before the last the company’s acquisition of Com- numerous calls from investors seek- cludes not only printers and personal gathering of Hewlett analysts, he paq in 2002 was that both companies ing more forward-looking projec- computers, but also computer sys- wrote, “Here we tackle a topic Hew- would become more profitable be- tions. tems that help corporations run their lett-Packard likely won’t talk about cause the economies of scale would Cisco had revenue of $22 billion in data centers and consumer devices at tomorrow’s analyst meeting but permit the combined company to cut fiscal 2004, a 17 percent increase like digital cameras. should. We recommend that man- costs. over fiscal 2003. Mr. Powell de- Computer printers accounted for agement break up the company with- A company spokeswoman con- scribed analysts’ estimates for 2005 30 percent of Hewlett-Packard’s in the next few years.” firmed what Ms. Fiorina said at the performance as “reasonable.” The sales last year but 80 percent of its Mr. Milunovich has also written meeting but would not elaborate. company’s fiscal year ends on July 31. TECHNOLOGY BRIEFING By affirming Wall Street’s esti- mates, industry analysts said, Cisco SPRINT TO ENHANCE HIGH-SPEED INTERNET ACCESS The may be trying to reassure investors, TELECOMMUNICATIONS Sprint Corporation, the nation’s third-largest provider of particularly as the company faces in- creasing competition and the possi- CABLEVISION GAINS INTERNET PHONE SUBSCRIBERS Ca- cellphone service, said yesterday that it would spend up bility of declining prices for routers blevision Systems, the nation’s sixth-largest cable oper- to $3 billion over the next three years to enhance its net- work to provide high-speed Internet access. Sprint joins and other pieces of Internet equip- ator, said yesterday that it had signed up more than ment. Verizon Wireless, among others, in offering the faster 250,000 Internet phone customers in the year since it in- Analysts said that pressure could service, which allows consumers to send and receive troduced the service. The company, which had not previ- come from competition from compa- e-mail, photos and other data at speeds rivaling those ously announced subscriber numbers, said it was signing nies in Asia, and a move from Cisco up about 1,000 new subscribers a day in the New York available on desktop computers with broadband connec- to get more of its revenue from sell- metropolitan area. Ken Belson (NYT) tions. Lucent Technologies, Motorola and Nortel Net- ing new kinds of technology, like works will install the equipment needed to run the serv- NEXTWAVE TO PAY SHAREHOLDERS $2.6 BILLION Next- equipment for Internet-based phone Wave Telecom will distribute at ice, which will use a technology known as EV-DO, or evo- services. least $2.62 billion to shareholders lution data optimized. Sprint’s shares fell 21 cents, to One financial analyst, who insisted as it scraps plans to become a $22.84. Ken Belson (NYT) that his name not be used, citing the mobile phone carrier and focuses policy of his Wall Street firm, said that he thought Cisco was giving on selling high-speed Internet ac- HARDWARE cess. Stockholders will receive as guidance now to try to reassure in- vestors that Cisco should still be con- much as $7.20 a share, NextWave TEXAS INSTRUMENTS NARROWS FORECAST Texas Instru- sidered a growth company. said in a reorganization plan ments, the world’s largest maker of chips for cellphones, Mr. Powell prefaced his remarks filed late Monday night with said yesterday that it expected fourth-quarter revenue and earnings per share at the midrange of its previous by noting that his comments should United States Bankruptcy Court be seen “not as a forecast, not a pre- estimates, as order trends remain soft. Texas Instru- in White Plains. The shares rose 16 cents yesterday, to diction and not a guarantee.” ments, based in Dallas, said it now expected revenue of $7.26, in over-the-counter trading. The chief executive, After talking at the analysts’ meet- Allen B. Salmasi, above, is taking the company private $3.02 billion to $3.14 billion, with earnings per share of 25 ing, he also said, “this is the first and will begin providing Internet services in Las Vegas cents to 27 cents. It forecast revenue for the crucial time in several years we’ve focused and New York City. The plan is part of NextWave’s ef- semiconductor unit of $2.68 billion to $2.78 billion. Ron on something beyond the next quar- fort to end Chapter 11 bankruptcy, begun six years ago Slaymaker, vice president and investor relations man- ter.” He added, “The message we when it could not pay for mobile phone licenses won in ager, said internal inventory would be down by the end of wanted to give is Cisco is a company government auctions. NextWave, which was allowed by the quarter, as the company starts production on fewer of growth.” the Supreme Court to keep the licenses it won for $4.8 bil- wafers for new chips than it ships out during the period. lion, returned some to the government and is selling the Inventory problems have plagued chip companies this rest for $5.38 billion to repay debts and give cash to year, both in their own warehouses and in the distribu- DO NOT FORGET THE NEEDIEST! shareholders. (Bloomberg News) tion channel. (Reuters) ID NAME: Nxxx,2004-12-08,C,004,Bs-BW,E2 3 7 15 25 50 75 85 93 97

COMPANY NEWS TECHNOLOGY ...... I.B.M. Sale: Bridge Between Companies and Cultures tegically,” said A. M. Sacconaghi, an Continued From Page A1 analyst at Sanford C. Bernstein & Company. “Palmisano has decided seas markets, management exper- to focus instead on businesses that tise and technological skills. are more profitable for I.B.M. and “This is an encouraging sign of the promise higher growth.” increasingly sophisticated trans-Pa- In a statement, Mr. Palmisano cific ties between the United States said the PC industry “continues to and China,” said Timothy F. Bresna- take on the characteristics of the han, an economist at Stanford Uni- home and consumer electronics in- versity. “Seeing the Chinese seeking dustry which favors enormous econ- these kinds of economic links can omies of scale and a focus on individ- only be a good thing.” ual users and buyers,” while I.B.M. The complex transaction is meant will focus more on the corporate to serve as a bridge between very market. different companies from different Still, industry analysts say, it is not cultures, by seeking to ensure that clear that a business that was strug- I.B.M. has a stake in the Chinese gling under I.B.M. will thrive under company’s success. Whether in the Lenovo. Worldwide growth in PC United States, in China or anywhere sales, according to Gartner, a re- else in the world, such a stake would search firm, will slow to about 2 per- be in I.B.M.’s self-interest; a messy cent a year from 2006 to 2008, less than half the projected revenue gains exit from the personal computer in- Bruce R. Feeley for The New York Times dustry could rankle corporate cus- of 4.7 percent a year from 2003 to The senior management of the current I.B.M. personal computer busi- 2005. The number of PC makers, ana- tomers, hurting I.B.M.’s other busi- ness, led by Stephen M. Ward Jr. and Fran O’Sullivan, will join Lenovo. nesses, and tarnish its stellar brand lysts say, will probably be winnowed name. in the next few years. I.B.M. has agreed to hold onto its employs about 10,000 people world- personal computer sales are about “Lenovo aspires to become a ma- stake in Lenovo for three years, the wide in its PC business, although $10 billion a year, or about 11 percent jor international player and a recog- companies said, with an option of ex- fewer than a quarter of those work- of its $89 billion in revenue, but it has nized brand, a company with the tending it. I.B.M.’s financial commit- ers are in the United States. In fact, hovered between slight profits and ability to sell into multinational cor- ment to Lenovo could help open 40 percent already work in China. losses in recent years. porations and be profitable,” said doors for its efforts to win other busi- Under the agreement, I.B.M. will In its hasty entry into the PC busi- Leslie Fiering, an analyst for Gart- ness in China. continue to handle technical support, ness in the early 1980’s, I.B.M. made ner. “This deal improves its chances, but the business is only going to get The senior management of the financing and warranty coverage what turned out to be a strategic mis- tougher over the next few years.” current I.B.M. personal computer globally for its former personal com- take: it chose outside suppliers for The personal computer industry, business will join the Chinese compa- puter division. Those tend to be the crucial technologies of the micro- like most technology businesses, is ny, led by Mr. Ward and Fran O’Sul- steady and profitable cash-generat- processor and the software operat- not one in which low labor costs — livan, the general manager of ing businesses, even as the PC busi- ing system, helping Intel and Micro- one of China’s advantages in compet- I.B.M.’s personal computer division. ness itself has been only intermit- soft become two of the most profit- ing with Western rivals — are much Besides management expertise, tently profitable for I.B.M. lately. able companies in the world. of an edge. The big winner in the Lenovo would be acquiring five-year It was I.B.M. that moved the per- For nearly a decade, executives business, Dell Computer, is mainly a brand-licensing rights to a computer sonal computer industry from a hob- have debated dropping out of the per- master of ultra-efficient manage- business best known for its I.B.M. byist market into the corporate and sonal computer business. Samuel J. ment of its suppliers, assembly and Thinkpad notebooks, its sleek black consumer mainstream with its first Palmisano, who became I.B.M.’s distribution. desktops and the product line’s dis- PC in 1981. But as the company lost chief executive in 2002, finally made I.B.M.’s rivals said the Lenovo tinctive tricolor I.B.M. logo. its PC market leadership to nimbler the move. He decided that the com- purchase would create uncertainty While Lenovo will have its head- players, the company has pulled pany’s management and investment among customers and provide op- quarters in New York, the hub of the back its commitment to the business, resources would be better used in its portunity for them. “It’s hard to I.B.M. PC business is in Raleigh, first by getting out of retail sales other businesses like software and think back on a successful large N.C., where its design and develop- and, in 2002, passing off its desktop services to help customers use infor- merger in the computer industry, ment operations are based. I.B.M. PC manufacturing to a Silicon Valley mation technology to help automate and I don’t see this one being differ- contractor, Sanmina-SCI. business tasks from product design ent,” Michael S. Dell, chairman of Andrew Ross Sorkin, in New York, Today, I.B.M. is a distant third in to procurement. Dell Computer, said yesterday. “We and Gary Rivlin, in San Francisco, worldwide PC market share, behind “The PC business is just not that like to acquire our competitors one contributed reporting for this article. Dell and Hewlett-Packard. I.B.M.’s important anymore to I.B.M. stra- customer at a time.”

Hewlett Chief Cisco Expects Says a Breakup To Hit Estimate Was Discussed For Revenue

By GARY RIVLIN By MATT RICHTEL

SAN FRANCISCO, Dec. 7 — For at SANTA CLARA, Calif., Dec. 7 — least a year, Wall Street analysts Cisco Systems, the maker of Internet who follow Hewlett-Packard have networking equipment, said on Tues- been calling on its chief executive, day that it was on track to meet Wall Carleton S. Fiorina, to break up the Street’s estimates for 13 percent company. On Tuesday, Ms. Fiorina growth in revenue for fiscal 2005. 3 acknowledged that on three occa- Noah Berger/Bloomberg News Dennis Powell, Cisco’s chief finan- sions the Hewlett board considered Carleton S. Fiorina, chief executive of Hewlett-Packard, made her first cial officer, speaking to a gathering doing just that, but each time the of several hundred analysts, said board unanimously decided to keep public response yesterday to calls for splitting up the company. that Cisco expected revenue to grow the company together. annually on the higher end of the 10 Ms. Fiorina’s admission came profit. that, alternatively, the company percent to 15 percent range through while speaking in Boston at the com- To Hewlett executives, its strong should split off its consumer prod- 2008. Mr. Powell also said that he ex- pany’s twice-a-year meeting for fi- presence in both the consumer and ucts from its business products. pected the company to experience nancial analysts. She did not offer business markets is a critical leg up Until Tuesday, Ms. Fiorina reso- some downward pressure on its any specifics about when those dis- in competition with its many rivals, lutely ignored such calls. gross margins over the next several cussions took place or how diligently including I.B.M. and Dell. The Associated Press quoted Ms. years. the board explored the possibility. “Our corporate customers recog- Fiorina as saying that breaking the Industry analysts, gathered for an Ms. Fiorina’s comments came in nize that our deep understanding of company apart would incur “real annual conference with Cisco execu- response to a question posed by Ste- the consumer side of things is criti- costs” and prove an enormous drain tives, expressed mild surprise at the ven Milunovich, a Merrill Lynch cal to their business,” Shane V. Robi- on executives. company’s willingness to announce technology analyst who has repeat- son, the company’s chief strategy Robert P. Wayman, the company’s its revenue projections. For the last edly called on Hewlett to spin off its and technology officer, said last sum- chief financial officer, said at the several years, since the downturn in printer business. Mr. Milunovich has mer in an interview. same meeting that a breakup would the technology sector, the company published reports asserting that a But Mr. Milunovich and other ana- make no sense because the pieces has declined to give year-end guid- spinoff would provide financial bene- lysts say they believe that the printer would be less efficient than the cur- ance, citing murky economic condi- fits to shareholders. business is so profitable that spin- rent company. Companies save mon- tions. Hewlett-Packard, with a market ning it off as a free-standing compa- ey by sharing the costs of human re- Mr. Powell said that the company capitalization of $63.7 billion, is a hy- ny would be good for investors. sources and other services. was seeing greater optimism among dra-headed behemoth that sells a diz- In a report Mr. Milunovich pub- Indeed, Ms. Fiorina’s rationale for its customers and was responding to zying array of products. That in- lished in June, just before the last the company’s acquisition of Com- numerous calls from investors seek- cludes not only printers and personal gathering of Hewlett analysts, he paq in 2002 was that both companies ing more forward-looking projec- computers, but also computer sys- wrote, “Here we tackle a topic Hew- would become more profitable be- tions. tems that help corporations run their lett-Packard likely won’t talk about cause the economies of scale would Cisco had revenue of $22 billion in data centers and consumer devices at tomorrow’s analyst meeting but permit the combined company to cut fiscal 2004, a 17 percent increase like digital cameras. should. We recommend that man- costs. over fiscal 2003. Mr. Powell de- Computer printers accounted for agement break up the company with- A company spokeswoman con- scribed analysts’ estimates for 2005 30 percent of Hewlett-Packard’s in the next few years.” firmed what Ms. Fiorina said at the performance as “reasonable.” The sales last year but 80 percent of its Mr. Milunovich has also written meeting but would not elaborate. company’s fiscal year ends on July 31. TECHNOLOGY BRIEFING By affirming Wall Street’s esti- mates, industry analysts said, Cisco SPRINT TO ENHANCE HIGH-SPEED INTERNET ACCESS The may be trying to reassure investors, TELECOMMUNICATIONS Sprint Corporation, the nation’s third-largest provider of particularly as the company faces in- creasing competition and the possi- CABLEVISION GAINS INTERNET PHONE SUBSCRIBERS Ca- cellphone service, said yesterday that it would spend up bility of declining prices for routers blevision Systems, the nation’s sixth-largest cable oper- to $3 billion over the next three years to enhance its net- work to provide high-speed Internet access. Sprint joins and other pieces of Internet equip- ator, said yesterday that it had signed up more than ment. Verizon Wireless, among others, in offering the faster 250,000 Internet phone customers in the year since it in- Analysts said that pressure could service, which allows consumers to send and receive troduced the service. The company, which had not previ- come from competition from compa- e-mail, photos and other data at speeds rivaling those ously announced subscriber numbers, said it was signing nies in Asia, and a move from Cisco up about 1,000 new subscribers a day in the New York available on desktop computers with broadband connec- to get more of its revenue from sell- metropolitan area. Ken Belson (NYT) tions. Lucent Technologies, Motorola and Nortel Net- ing new kinds of technology, like works will install the equipment needed to run the serv- NEXTWAVE TO PAY SHAREHOLDERS $2.6 BILLION Next- equipment for Internet-based phone Wave Telecom will distribute at ice, which will use a technology known as EV-DO, or evo- services. least $2.62 billion to shareholders lution data optimized. Sprint’s shares fell 21 cents, to One financial analyst, who insisted as it scraps plans to become a $22.84. Ken Belson (NYT) that his name not be used, citing the mobile phone carrier and focuses policy of his Wall Street firm, said that he thought Cisco was giving on selling high-speed Internet ac- HARDWARE cess. Stockholders will receive as guidance now to try to reassure in- vestors that Cisco should still be con- much as $7.20 a share, NextWave TEXAS INSTRUMENTS NARROWS FORECAST Texas Instru- sidered a growth company. said in a reorganization plan ments, the world’s largest maker of chips for cellphones, Mr. Powell prefaced his remarks filed late Monday night with said yesterday that it expected fourth-quarter revenue and earnings per share at the midrange of its previous by noting that his comments should United States Bankruptcy Court be seen “not as a forecast, not a pre- estimates, as order trends remain soft. Texas Instru- in White Plains. The shares rose 16 cents yesterday, to diction and not a guarantee.” ments, based in Dallas, said it now expected revenue of $7.26, in over-the-counter trading. The chief executive, After talking at the analysts’ meet- Allen B. Salmasi, above, is taking the company private $3.02 billion to $3.14 billion, with earnings per share of 25 ing, he also said, “this is the first and will begin providing Internet services in Las Vegas cents to 27 cents. It forecast revenue for the crucial time in several years we’ve focused and New York City. The plan is part of NextWave’s ef- semiconductor unit of $2.68 billion to $2.78 billion. Ron on something beyond the next quar- fort to end Chapter 11 bankruptcy, begun six years ago Slaymaker, vice president and investor relations man- ter.” He added, “The message we when it could not pay for mobile phone licenses won in ager, said internal inventory would be down by the end of wanted to give is Cisco is a company government auctions. NextWave, which was allowed by the quarter, as the company starts production on fewer of growth.” the Supreme Court to keep the licenses it won for $4.8 bil- wafers for new chips than it ships out during the period. lion, returned some to the government and is selling the Inventory problems have plagued chip companies this rest for $5.38 billion to repay debts and give cash to year, both in their own warehouses and in the distribu- DO NOT FORGET THE NEEDIEST! shareholders. (Bloomberg News) tion channel. (Reuters) C M Y C M Y YELO MAG CYAN 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-13,C,001,Bs-BK,E1 C M YID NAME:YELO Nxxx,2004-12-13,C,001,Bs-BK,E1MAG CYAN 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-13,C,001,Bs-BK,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97 C M Y ID NAME: Nxxx,2004-12-13,C,001,Bs-BK,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

MONDAY, DECEMBER 13, 2004 BUSINESS BUSINESS BUSINESS C M Y C M I.B.M.Y Sought a China Partnership,YELO MAG CYAN 3 7Not15 25 50 Just75 85 93 97a Sale ID NAME: Nxxx,2004-12-13,C,001,Bs-BK,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-13,C,001,Bs-BK,E1 By STEVE LOHR

In July 2003, Samuel J. Palmisano,BUSINESS the chief executive of I.B.M., traveled to Bei- jing to explore the sale of the company’s personal computer business. But he did not start by making the usual visit with execu- tives of I.B.M.’s preferred partner, Lenovo, China’s largest personal computer maker. Instead, Mr. Palmisano first engaged in a bit of old-fashioned courtship. Before for- mally approaching Lenovo, he sought per- mission from the parents, by meeting pri- vately with a senior Chinese government Taiwan Semiconductor Manufacturing official in charge of economic and technol- For Taiwan, Another Threat BUSINESS ogy policy. I.B.M. was not merely looking to sell its Taiwan, which prides itself on being the BUSINESS PC business, Mr. Palmisano told the offi- “silicon island” of East Asia, was caught cial, but had bigger aspirations of creating off guard by the Lenovo deal. Page C7. a global enterprise, with I.B.M. contribut- ing technology, management, marketing tives, began in 2000, shortly after Mr. Pal- and distribution. misano became the company’s president The idea, Mr. Palmisano explained, and chief operating officer. He ordered an would be to build a modern and truly inter- extensive review of the PC business and national Chinese-owned corporation. The decided to stop selling I.B.M. PC’s through move, he added, would demonstrate Chi- retail stores. na’s desire to take that next step toward At about that time, I.B.M. approached economic maturity by investing abroad in- Lenovo for the first time, according to a stead of merely serving as a manufactur- person close to Lenovo, seeking to sell its ing hub for the rest of the world. PC business for $3 billion to $4 billion. At The senior Chinese government official, the time, I.B.M. had let its investment Mr. Palmisano recalled, responded, “That bankers know that if an attractive offer is the future model for where we see China came up for the PC business, it would cer- headed.” tainly consider a sale. But I.B.M. execu- Permission was granted. tives say that any discussion in 2000 was Inside I.B.M., the issue of whether to stay probably a prospecting overture by an out- in the personal computer business has been side adviser representing the company. debated for a decade. But the road to the In May 2002, Mr. Palmisano directed Lenovo deal, according to I.B.M. execu- Continued on Page 6

$20 Fast Forward billion Consumer spending on DVD’s has risen sharply since the DVD player was first 15 introduced in 1997. $20 Fast Forward $20 Fast Forward billion billion Consumer spending 10 Consumer spending on DVD’s has risen on DVD’s has risen sharply since the sharply since the DVD player was first 15 DVD player was first 15 DVD RENTALS introduced in 1997. 5 introduced in 1997. $20 DVD SALES Fast Forward billion Consumer spending 10 Projected 10 on DVD’s has risen 0 sharply since the ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 DVD player was first 15 introduced in 1997. Source: Adams Media Research The New York Times DVD RENTALS DVD RENTALS 5 5 DVD SALES DVD SALES 10

Projected Projected 0 0 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 DVD RENTALS Fast Forward $20 5 billion Source: Adams Media Research The New York Times DVD SALES Source: TODAYAdams Media Research The New York Times $20 FastConsumer Forward spending +2% Retail Sales billion +1 Consumeron DVD’s has spending risen November figures due Projected 0 onsharply DVD’s since has risenthe 0 at 8:30 a.m. Eastern time. –1 sharplyDVD player since was the first 15 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 MSJJAO –2 Expected: –0.1% DVDintroduced player inwas 1997. first 15 introduced in 1997. Source: Adams Media Research The New York Times

10 TODAY TODAY 10 +2 Retail Sales +2% Retail Sales % +1 +1 November figures due November figures due DVD0 RENTALS 0 at 8:30 a.m. Eastern time. 5 –1 at 8:30 a.m. Eastern time. DVDDVD–1 RENTALS SALES MSJJAO –2 5 MSJJAO –2 Expected: –0.1% DVD SALESExpected: –0.1% TODAY Projected 0 +2% Retail Sales Projected +1 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 0 November figures due 0 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 –1 at 8:30 a.m. Eastern time. Source: Adams Media Research The New York Times MSJJAO –2 Expected: –0.1% Source: Adams Media Research The New York Times

TODAY TODAY +2% Retail Sales +1 +2% RetailNovember Sales figures due +10 Novemberat 8:30 a.m. figures Eastern due time. –10 MSJJAO –1–2 atExpected: 8:30 a.m. Eastern–0.1% time. MSJJAO –2 Expected: –0.1% ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1 3 7 15 25 50 75 85 93 97

$89.1 I.B.M.’s decision to sell its PC business last week was another Reinventing I.B.M. $2.8 in a series of steps it has taken in recent years to transform $81.7 itself from a company that mostly sells hardware and software $1.1 3 7 15 25 50 75 85 93 97 $2.6 ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1 to one whose main function is selling its expertise. $2.9

Revenue breakdown, figures in billions $64.1 INVESTMENTS INVESTMENTS OTHER OTHER $59.7 FINANCING $4.1 FINANCING $28.9 FINANCING $42.6 Federal systems Federal systems $2.1 SERVICES SERVICES SERVICES contracts, other $0.9 contracts, other $4.5 $9.7 General SERVICES SERVICES $7.3 Maintenance $7.2 $89.1 I.B.M.’sInformation decision to sell its PC businessInformation last week was another Reinventing I.B.M. processing processing $7.9 $2.8 $11.9 in a series of steps it has takenTotal in recent years to transform SOFTWARE $81.7 SOFTWARE SOFTWARE $11.3 $1.1 itselfMaintenance from a company that$34.4 mostly sellsMaintenance hardware and software $2.6 $14.3 to one whose main function is selling its expertise. $2.5 $11.3 HARDWARE $2.9 $3.9 $3.3 SOFTWARE $1.7 SOFTWARE Original Revenue breakdown, figures in billions 3 7 15 25 50 75 85 93 97 INVESTMENTSequipment INVESTMENTS $6.4 $64.1 $11.3 $13.0 ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1 HARDWARE HARDWARE manufacturing 3 7 15 25 50 75 85 93 97 OTHER OTHER $59.7 FINANCING $4.1 FINANCING $28.9 FINANCINGHARDWARE $42.6 $35.4 HARDWARE $28.2 ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1Workstations $8.7 Workstations Workstations Federal systems Federal systems $2.1 SERVICES SERVICES SERVICES$5.6 contracts, other $0.9 contracts,Peripherals other $4.5 Peripherals $9.7 Peripherals General $15.2 $10.2 $9.8 SERVICES SERVICESProcessors $7.3 Processors Processors Maintenance $7.2 Information InformationSource: Company reports ’82 ’88 ’94 ’98 ’03 processing processing $7.9 $11.9 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1Total SOFTWARE SOFTWARE SOFTWARE $11.3 The New York Times Maintenance $34.4 Maintenance $89.1 $14.3 I.B.M.’s decision to sell its PC business last week was another $2.5 $11.3 $89.1 Reinventing I.B.M. in a series of steps it has taken in recent years to transform HARDWARE I.B.M.’s decision$3.3 to sell its PC business$2.8 last week was another $3.9 Reinventing I.B.M. $81.7 itselfSOFTWARE from a company$1.7 that mostly sellsSOFTWARE hardware and software Original in a series of steps it has$1.1 taken in recent years to transform $2.8 equipment $2.6 $81.7 to one whose main function$6.4 is selling its expertise. itself$2.9 from$13.0 a company that mostly sells hardware and software $1.1 HARDWARE HARDWARE $11.3 manufacturing 33 77 1515 2525 5050 7575 8585 9393 9797$2.6 IDID NAME:NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1Nxxx,2004-12-13,C,006,Bs-BW,E1 to one whose mainHARDWARE function is selling its expertise.$35.4 HARDWARE $28.2 $2.9 Workstations $8.7 Workstations Workstations Revenue breakdown, figures in billions INVESTMENTS INVESTMENTS$5.6 Peripherals PeripheralsRevenue$64.1 breakdown, figuresPeripherals in billions $89.1 $15.2 I.B.M.’s decision to sell its PC business last week was anotherINVESTMENTS INVESTMENTS OTHER OTHER $59.7 FINANCING $4.1 FINANCING $28.9 FINANCING $42.6 $64.1 $10.2 Reinventing I.B.M. in a series$9.8 of steps it has taken in recent years to transform $2.8 Federal systems Federal Processorssystems $2.1 ProcessorsOTHER ProcessorsOTHER $59.7 FINANCING $4.1 FINANCING $81.7$28.9 FINANCING $42.6 SERVICES SERVICES itself fromSERVICES a company that mostly sells hardware and software $1.1 contracts, other $0.9 contracts,Source: other Company reports$4.5 Federal $9.7systems Federal systems $2.1 $2.6 General’82 ’88 ’943 7 15 25 50SERVICES75 85 93 97’98 SERVICES ’03 SERVICES contracts, other $0.9 contracts,to one other whose main$4.5 function is selling its expertise.$9.7 $2.9 ID NAME:SERVICES Nxxx,2004-12-13,C,006,Bs-BW,E1SERVICES $7.3 General The New York Times Maintenance $7.2 Information Informationen apart. But apparently the Chinese LauraSERVICES Conigliaro, an analyst withSERVICES $7.3 Revenue breakdown, figures in billions Maintenance $7.2 $89.1$89.1 Continued From First Business Page option was the$7.9 only one seriously Goldman, Sachs, whose investment I.B.M.’s$11.9 decision to sell its PC business last week was anotherINVESTMENTS INVESTMENTS processing Total processing Information InformationI.B.M.’s decision to sell its PC business last week$64.1 was another pursued by I.B.M. SOFTWARE bankingReinventingReinventing arm advisedSOFTWARE Lenovo,I.B.M.I.B.M. wrote SOFTWARE$7.9 $2.8 processingOTHER $11.3 processingOTHERinin aa seriesseries ofof stepssteps$59.7 itit hashas takentakenFINANCING inin recentrecent yearsyears toto transform$4.1transformFINANCING $11.9$28.9 FINANCING $42.6$2.8 Maintenance $34.4 Maintenance“There were simpler transactions in a report last week. Total “Ultimately, SOFTWARE$14.3 SOFTWARE $81.7$81.7 SOFTWARE John Joyce, then I.B.M.’s chief finan- Federal systems Federalitselfitself systems fromfrom aa companycompany$2.1 thatthat mostlymostly sellssells hardwarehardware and$11.3and softwaresoftware $1.1$1.1 $2.5 $11.3 Maintenance $34.4 Maintenance SERVICES SERVICES $2.6$2.6 SERVICES cial officer, to meet with Lenovo’s we could have done,” Mr.HARDWARE Palmisano this is the$3.3 single most valuable bene- to one whose main function is selling its expertise. $14.3 $3.9 contracts, other $0.9 $2.5 contracts,to one other whose main$4.5 function is selling its expertise.$9.7 $2.9$2.9 senior management to sound out the said, adding, “What we Original wanted was fit to I.B.M. from this transaction.” $11.3 HARDWAREGeneral SOFTWARE $1.7 SOFTWARE $3.9 $3.3 company’s interest in establishing a not a divestiture, but thisequipment strategic SERVICESThe payoff for I.B.M., if any, SERVICES will $7.3 Original $6.4 relationship with$11.3 Lenovo and China.” comeRevenueSOFTWARERevenue gradually.$13.0 breakdown,breakdown,$1.7 The Lenovo figuresfigures deal, inin SOFTWARE billionsbillions in Maintenance $7.2 $89.1 HARDWAREbusiness relationship. Lenovo, HARDWARE ac- manufacturing Information Information equipment INVESTMENTSINVESTMENTS INVESTMENTSINVESTMENTS I.B.M.’swhich decisionI.B.M. will toHARDWARE takesell itsan $6.4 PC18.9 business percent last$35.4 weekHARDWARE was another $28.2 $64.1$64.1$13.0 cording to I.B.M. executives, was ReinventingThe sale of I.B.M.’s personalI.B.M. com- HARDWARE HARDWARE $11.3$7.9 manufacturing $2.8 $11.9 Workstations $8.7 Workstations Workstations in OTHERaOTHERprocessing series of steps it has takenTotal in recentOTHEROTHERprocessing years to transform$59.7 FINANCING $4.1 FINANCING $28.9$28.9 FINANCING $42.6$42.6 clearly intrigued and had long been puter business to Lenovo for $1.75 bil- stake in$5.6 the Chinese company, is a $59.7 FINANCINGSOFTWARE $81.7 $4.1 HARDWAREFINANCINGSOFTWARE $35.4 HARDWAREFINANCINGSOFTWARE $28.2 itselfsignFederalWorkstationsMaintenance from of I.B.M.’ssystemsa company commitment that$34.4 $8.7mostly to sells Federal Chi-WorkstationsMaintenance hardware systems and software$2.1 Workstations $11.3 $1.1 Peripheralsexploring ways to increase its inter-Peripheralslion, announced last Tuesday,Peripherals is “a Federal systems Federal systems $2.1 SERVICESSERVICES $2.6 $5.6 SERVICESSERVICES SERVICESSERVICES $14.3 national presence. three-dimensional$15.2 deal,” according to na.contracts,contracts,one I.B.M. whose otherisother main placing $0.9function$0.9 10,000$2.5 is of selling its contracts,contracts,em- its expertise. otherother $4.5$4.5 $2.9 $9.7$9.7 $10.2 Peripherals$9.8 Peripherals $11.3 GeneralPeripheralsGeneralHARDWARE Processors Processorsto Mr. Palmisano. The saleProcessors provides ployees, its brand for five$3.9 years and $15.2 $3.3 More than a year later, at the $10.2 $7.3 $9.8 someSERVICESSERVICESSOFTWARE its prestige$1.7 in Lenovo’s hands.SERVICESSERVICESSOFTWARE $7.3 Original Source:meeting Company in Beijing, reports the government I.B.M. with a path to leave a business Processors Processors MaintenanceProcessorsMaintenance $7.2 ’82 Revenue breakdown,’88 figures in billions ’94 ’98 INVESTMENTSequipment’03 INVESTMENTS$7.2 official told Mr. Palmisano that a few that is large but not profitable. It is ThereInformationInformation is a lot more at stake$6.4 thanInformationInformation the $64.1 $11.3 $13.0 processingSource:HARDWARE Company reports ’82 processingHARDWARE $7.9$7.9’88 manufacturing ’94 $11.9’98 ’03 years earlier the Chinese authorities alsoOTHER the latest step in I.B.M.’s shiftOTHER $1.25processing billion in cash and stockFINANCING Lenovoprocessing FINANCINGThe New York Times $28.9 FINANCINGHARDWARE $42.6 $11.9$35.4 HARDWARE $28.2 $59.7 TotalTotal $4.1 SOFTWARESOFTWARE SOFTWARESOFTWARE SOFTWARESOFTWARE toward services, software and spe- isWorkstations paying, and $500 million$8.7 in debtWorkstations ob- Workstations $11.3$11.3 The New York Times would have been involved in such Federal systems FederalMaintenance Maintenancesystems $2.1 $34.4$34.4 MaintenanceMaintenance $5.6 $14.3 talks. But times had changed, the of- cialized hardware technology from ligations it will assume. SERVICES SERVICES SERVICES $14.3 contracts, other $0.9 contracts,Peripherals other $4.5 $2.5$2.5 Peripherals $9.7 $11.3$11.3 HARDWAREPeripherals ficial said, and Lenovo and I.B.M. mainframes to microprocessors for In China, I.B.M. is usingGeneral a varia- $15.2 HARDWARE $3.3$3.3 $10.2$3.9$3.9 $9.8 could negotiate by themselves. computerSERVICES game consoles, allSERVICES of tionProcessors of the globalization$7.3 formula thatProcessors OriginalOriginalProcessors SOFTWARESOFTWARE $1.7$1.7 MaintenanceSOFTWARESOFTWARE By October 2003, I.B.M. resumed which promise higher profits than has worked well for it in Japan, Eu- $7.2 equipmentequipment Information InformationSource: Company reports $6.4$6.4’82 $11.3’88 $13.0$13.0’94 ’98 ’03 the fiercely competitive PC business. ropeHARDWAREHARDWARE and elsewhere.$7.9 I.B.M. patientlyHARDWAREHARDWARE $11.3 manufacturingmanufacturing discussions with Lenovo. In March processing processing $11.9 HARDWARE $35.4 HARDWARE $28.2 Yet the most intriguing,Total and poten- nurtures close ties with SOFTWARE the govern- SOFTWARE SOFTWAREHARDWARE $35.4 HARDWARE $28.2 2004, Mr. Palmisano went to Beijing WorkstationsWorkstations $8.7$8.7 WorkstationsWorkstations $11.3 WorkstationsWorkstations The New York Times ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1 to meet with Lenovo’s founder, Liu tiallyMaintenance most3 important,7 15 25 $34.4 dimension50 75 85Maintenance 93 of 97ment and becomes a premier em- $5.6$5.6 $14.3 Chuanzhi, as well as the president, the deal for the company$2.5 is that it is ployerPeripheralsPeripherals and a stellar$11.3 corporateHARDWARE citizenPeripheralsPeripherals PeripheralsPeripherals $3.3 $15.2$15.2 Yang Yuanqing, and the chief finan- I.B.M.’s China card. The $3.9new Lenovo, — so much so that it is eventually$10.2$10.2 re- $9.8$9.8 SOFTWARE $1.7 SOFTWAREgardedProcessorsProcessors more like a localOriginal companyProcessorsProcessors ProcessorsProcessors cial officer, Mary Ma. That was folding in the I.B.M. personal com- equipment puter business, will be China’s$6.4 fifth- thanSource: an Company outsider. reports ’82 $13.0 ’88 ’94 ’98 ’03 when Mr. Palmisano described the HARDWARE HARDWARESource: Company reports$11.3 manufacturing’82 ’88 ’94 ’98 ’03 full dimensions of what he had in largest company, with $12.5 billion in “We don’t have any special deal 3 7 HARDWARE15 25 50 75 85 93 97$35.4 HARDWARE $28.2 ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1Workstations $8.7 Workstationswith the Chinese governmentWorkstations or any TheThe NewNew YorkYork TimesTimes mind. “I put it all on the table,” he sales in 2003, and the Chinese govern- $5.6 other government really,” Mr. Pal- said. mentPeripherals will remain a big shareholder.Peripherals Peripherals I.B.M. stands eager and ready to help misano explained$15.2 last week at I.B.M. Lenovo was definitely interested, $10.2 $9.8 though any such deal would be com- ChinaProcessors with its industrial policyProcessors of headquarters. “It’s a muchProcessors$89.1 more I.B.M.’s decision to sell its PC business last week was another plicated. Many of the essential ele- moving up the economic ladder by subtle, more sophisticated approach. Reinventing I.B.M. in a series of steps it has taken in recent yearsSource: to Company transform reports ’82 ’88 $2.8 ’94 ’98 ’03 ments of the deal were hammered building the high-technology engine $81.7It is that if you become ingrained in $1.1 itselfout from over a eight company days inthat June, mostly in a sellshotel hardwarerooms toand power software modern corporations $2.6their agenda and become truly local The New York Times to nearone whose Raleigh, main N.C., function where is selling I.B.M.’s its expertise.and government institutions, with $2.9and help them advance, then your op- PC business is based. The principal I.B.M. services and software. portunities are enlarged. $89.1 I.B.M.’s“You decision become to part sell its of PC their business strat- last week was another Revenue breakdown, figures in billionsnegotiators included Mr. Joyce, who The deal is not expected to face anyReinventing regulatory INVESTMENTS hurdles. I.B.M. Although egy,” heINVESTMENTS added. $2.8 now heads I.B.M.’s services busi- $64.1 in a series of steps it has taken in recent years to transform $81.7 there is a requirement, dating back I.B.M. is no newcomer to China. It $1.1 OTHER OTHER ness, Stephen M.$59.7 Ward Jr.,FINANCING an I.B.M. $4.1 FINANCING itself$28.9 fromFINANCING a company that mostly$42.6 sells hardware and software $2.6 to the era of the cold war, for review set up a business there 20 years ago, Federal systems Federal executivesystems who will$2.1 become chief ex- to one whose main function is selling its expertise. $2.9 SERVICES of possible nationalSERVICES security implica- and thereSERVICES are now 4,200 I.B.M. em- contracts, other $0.9 contracts,ecutive other of the Lenovo$4.5 PC business, $9.7 and Mr. Yang. General tions, officials in Washington told ployees in China. In 1995, the compa- $7.3 I.B.M.Revenue executives breakdown, in advance figures ofin thebillionsny opened a research laboratory, SERVICES SERVICES There were other interested bid- $64.1 INVESTMENTS INVESTMENTS Maintenance announcement$7.2 that clearing it would which now employs 150 Chinese sci- Information Informationders, including one from an Ameri- OTHER OTHER $59.7 FINANCING $4.1 FINANCING $28.9 FINANCING $42.6 $7.9 not be a problem. $11.9entists. Five years ago, I.B.M. estab- processing Total processingcan buyout firm whose offer re- Federal systems Federal systems $2.1 mained on the table untilSOFTWARE the end. The pact couldSOFTWARE give I.B.M. “an ex- lished aSOFTWARE Chinese softwareSERVICES develop- SERVICES SERVICES Maintenance $34.4 Maintenance contracts,$11.3 other $0.9 contracts, other $4.5 $9.7 And the Lenovo deal could have fall- tremely important leg up in China,” ment lab, which today hasGeneral 500$14.3 engi- $2.5 $11.3 neers working on Linux projects HARDWARE SERVICES$3.3 SERVICES $7.3 $3.9 alone. (I.B.M. is the leadingMaintenance corpo- $7.2 SOFTWARE $1.7 SOFTWARE Original Information Informationrate supporter of Linux, a free oper- $7.9 $6.4 equipment processing$13.0 processing $11.9 $11.3 Total ating system that is an alternativeSOFTWARE to SOFTWARE SOFTWARE HARDWARE HARDWARE manufacturing $11.3 Maintenance HARDWARE$34.4 Maintenance$35.4MicrosoftHARDWARE Windows.) $28.2 $14.3 Workstations $8.7 Workstations Workstations With the Lenovo deal, I.B.M. is $5.6 $2.5 $11.3 forging closer links withHARDWARE China. $3.3 Peripherals Peripherals Peripherals $3.9 $15.2 SOFTWARE $1.7 SOFTWAREWhile there were other offersOriginal for its $10.2 $9.8 PC business, Mr. Palmisanoequipment pushed Processors Processors Processors $6.4 $11.3 $13.0 HARDWARE HARDWAREfor this deal — more a bridgemanufacturing to an- Source: Company reports ’82 ’88 ’94 ’98 ’03 HARDWARE $35.4 HARDWARE $28.2 Workstations $8.7 Workstationsother economy than a simpleWorkstations sell-off. Mr. Palmisano, 53, The who New York became Times $5.6 Peripherals Peripherals Peripherals chief executive $15.2in 2002, is the leader $10.2 Processors Processorsof a generation of Processors executives $9.8 groomed to run a corporation that is Source: Company reports ’82 based in the United’88 States but gets ’94 ’98 ’03

the majority of its revenue abroad, The New York Times as I.B.M. does today. Traveling ex- tensively is part of the regimen, but so are stints of living abroad. Mr. Palmisano managed I.B.M.’s large business in Japan in the early 1990’s. He traveled extensively in China Photos/Getty Images Lenovo’s chairman, Liu Chuanzhi, left, and John Joyce, the head of David Barboza contributed report- IBM Global Services, exchanging congratulations in Beijing last week. ing from Beijing for this article.

2 ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1 3 7 15 25 50 75 85 93 97

$89.1 I.B.M.’s decision to sell its PC business last week was another 3 7 15 25 50 75 85 93 97 Reinventing I.B.M. ID NAME: Nxxx,2004-12-13,C,006,Bs-BW,E1 $2.8 in a series of steps it has taken in recent years to transform $81.7 $1.1 itself from a company that mostly sells hardware and software $2.6 to one whose main function is selling its expertise. $2.9

Revenue breakdown, figures in billions $64.1 INVESTMENTS INVESTMENTS OTHER OTHER $59.7 FINANCING $4.1 FINANCING $28.9 FINANCING $42.6 Federal systems Federal systems $2.1 SERVICES SERVICES SERVICES $89.1 contracts, other $0.9 contracts, other $4.5 $9.7 General I.B.M.’s decision to sell its PC business last week was another Reinventing I.B.M. $2.8 SERVICES SERVICES $7.3 in a series of steps it has taken in recent years to transform $81.7 Maintenance $7.2 itself from a company that mostly sells hardware and software $1.1 Information Information $2.6 to one whose main function is selling its expertise. processing processing $7.9 $11.9 $2.9 Total SOFTWARE SOFTWARE SOFTWARE $11.3 Maintenance $34.4 Maintenance $14.3 Revenue breakdown, figures in billions INVESTMENTS INVESTMENTS $2.5 $11.3 HARDWARE $64.1 $3.9 $3.3 OTHER OTHER $59.7 FINANCING $4.1 FINANCING $28.9 FINANCING $42.6 SOFTWARE $1.7 SOFTWARE Original Federal systems Federal systems $2.1 $6.4 equipment $13.0 SERVICES SERVICES SERVICES HARDWARE HARDWARE $11.3 manufacturing contracts, other $0.9 contracts, other $4.5 $9.7 HARDWARE $35.4 HARDWARE $28.2 General Workstations $8.7 Workstations Workstations SERVICES SERVICES $7.3 $5.6 Maintenance $7.2 Peripherals Peripherals Peripherals Information Information $15.2 processing processing $7.9 $11.9 $10.2 $9.8 Total SOFTWARE SOFTWARE SOFTWARE Processors Processors Processors $11.3 Maintenance $34.4 Maintenance $14.3 Source: Company reports ’82 ’88 ’94 ’98 ’03 $2.5 $11.3 HARDWARE $3.3 The$3.9 New York Times SOFTWARE $1.7 SOFTWARE Original $6.4 equipment $13.0 HARDWARE HARDWARE $11.3 manufacturing HARDWARE $35.4 HARDWARE $28.2 Workstations $8.7 Workstations Workstations $5.6 Peripherals Peripherals Peripherals $15.2 $10.2 Processors Processors Processors $9.8 Source: Company reports ’82 ’88 ’94 ’98 ’03

The New York Times

Asia, including China, and he contin- ues to do so as chief executive. He makes three or four trips a year to China on business, and last summer he traveled there with his four chil- dren. “It was so they could get a feel for the Chinese culture and what’s going on there,” he said. “China is go- ing to be such a huge influence in the world in their lives.” I.B.M.’s departure from the per- sonal computer industry, Mr. Palmi- sano insisted, does not mean that the PC business is a bad one. But it does signal that it is no longer crucial to I.B.M.’s strategy of emphasizing services, software and server com- puters for corporate customers. K. M. Cannon/Bloomberg News In an e-mail message to employees last week, Mr. Palmisano explained Samuel J. Palmisano, above, pur- how the company’s strategy and the sued a sort of personal diplomacy PC business had parted ways. Today, with Chinese officials on I.B.M.’s there are two ways to create long- behalf. Right, Stephen M. Ward term value for customers and share- Jr., an I.B.M. executive who will holders in the information technol- lead the Lenovo PC business, with ogy industry, he wrote: “Invest heav- Fran O’Sullivan, general manager ily in R.& D. and be the high-value in- of I.B.M.’s personal systems group. novation provider for enterprises, or Bruce R. Feeley for The New York Times differentiate by leveraging vast economies of scale, high volumes and price.” I.B.M. is clearly choosing the first path, and has made a judgment that the PC business is inevitably on the second path.

3 C M Y C M Y ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1YELO MAG CYAN 3 7 15 YELO25 50MAG75CYAN85 93 97 3 7 15 25 50 75 85 93 97

C M Y ID NAME: Nxxx,2004-12-13,C,001,Bs-BK,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

MONDAY, DECEMBER 13, 2004 Taiwan Watches Its Economy Slip to China

By KEITH BRADSHER Trade Migration Trade Migration OnceTAIPEI, dependent BUSINESSTaiwan, onDec. the 12 United — When Once dependent on the United theStates,Lenovo Taiwan Group now Ltd.exports of twice China States, Taiwan now exports twice agreedas much last to week China to buyas it I.B.M.’s does to per- as much to China as it does to sonalAmerica. computer division in exchange America. for cash and a large block of Lenovo stock, it was an even greater shock for peopleTAIWAN in Taiwan thanTAIWAN those in the TAIWAN TAIWAN UnitedEXPORTS States. IMPORTS EXPORTS IMPORTS $50Taiwan billion prides itself on being the $50 billion “silicon island” of East Asia; after all, 40 theTO place THE has nurtured some of 40 TO THE the world’sUNITED largest manufacturers of UNITED STATES STATES computer30 chips, laptopFROM computers THE 30 FROM THE and notebook computers.UNITED But busi- UNITED STATES STATES nesses20 in Taiwan have been slow to 20 establish brands known to retail cus- tomers. And now, with I.B.M.’s pow- 10 TO CHINA* FROM 10 TO CHINA* FROM erful PC brand slipping CHINA* into the CHINA* mainland’s hands, those companies 0 may0 soon find it even harder to trump’90 their’95 mainland’00 ’03 ’90 counterparts’95 ’00 ’03 ’90 ’95 ’00 ’03 ’90 ’95 ’00 ’03 and move beyond their role as low- cost*Includes producers. Hong Kong and Macao. *Includes Hong Kong and Macao. “You look at China, how fast it’s Source: Taiwan Directorate General of Customs Source: Taiwan Directorate General of Customs moving, it’s incredible,” said Frank

Huang, chairman of theThe Powerchip New York Times The New York Times Semiconductor Corporation, Tai- wan’s third-largest computer chip maker. “Nobody knows if it will work for Lenovo, but at least they have the guts to try.” A big advantage that Lenovo and other Chinese companies have over companies in Taiwan these days is that many corporations and invest- ors want their stock: China has be- come one of the hottest investment plays in the world, despite the poor performance in recent years of Chi- nese stock markets and poor corpo- rate governance at many Chinese companies, as shown most recently by the loss of $550 million in deriva- tives transactions by the China Avia- tion Oil (Singapore) Corporation. But voters in Taiwan may have raised the appeal of their island as a place to do business. In legislative elections on Saturday, they unex- pectedly preserved the thin majority of lawmakers opposed to repeated moves by President Chen Shui-bian to increase Taiwan’s political inde-

$20 Fast Forward billion Consumer spending on DVD’s has risen sharply since the DVD player was first 15 introduced in 1997.

10 GET THE BLADE SERVERS OF TOMORROWGET THE BLADE TODAY. SERVERS OF TOMORROW TODAY. GET MORE OUT OF NOW. GET MORE OUT OF NOW. DVD RENTALS 5 DVD SALES www.dell.com/blades10www.dell.com/blades10• 1.800.934.4805 • 1.800.934.4805 Projected 0 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04

Source: Adams Media Research The New York Times

TODAY +2% Retail Sales +1 November figures due 0 –1 at 8:30 a.m. Eastern time. MSJJAO –2 Expected: –0.1% C M Y ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

C M Y ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

C M Y ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

Trade Migration Once dependent on the United States, Taiwan now exports twice as much to China as it does to America.

TAIWAN TAIWAN EXPORTS IMPORTS $50 billion Trade Migration 40 TO THE OnceUNITED dependent on the United STATES States,30 Taiwan now exportsFROM THE twice UNITED as much to China as itSTATES does to America.20

10 TO CHINA* FROM TAIWAN TAIWANCHINA* EXPORTS IMPORTS 0 $50 billion ’90 ’95 ’00 ’03 ’90 ’95 ’00 ’03 40 TO THE *IncludesUNITED Hong Kong and Macao. STATES FROM THE Source:30 Taiwan Directorate General of Customs Trade MigrationUNITED Once dependent on theSTATES United 20 The New York Times States, Taiwan now exports twice as much to China as it does to 10 TO CHINA* FROM America. CHINA* 0 TAIWAN’90 ’95 ’00 ’03 TAIWAN’90 ’95 ’00 ’03 EXPORTS IMPORTS $50*Includes billion Hong Kong and Macao.

Source: Taiwan Directorate General of Customs C M Y 40 TO THE UNITED YELO MAG CYAN 3 7 15 25 50 75 85 93 97 STATES The New York Times ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E130 FROM THE UNITED STATES 20

10 TO CHINA* FROM CHINA* 0 ’90 ’95 ’00 ’03 ’90 ’95 ’00 ’03

*Includes Hong Kong and Macao. C M Y Source: Taiwan Directorate General of Customs YELO MAG CYAN 3 7 15 25 50 75 85 93 97 ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1The New York Times

pendence from mainland China — malls and other projects in China. helped Gillette, for example, control steps that Beijing has labeled as pro- Overseas money managers do invest an inflow of counterfeit Duracell bat- vocative and has said could possibly substantial sums in Taiwan’s stock teries from the mainland. lead to war. While computer and semiconduc- The most ardently pro-Beijing and tor companies have moved many anti-Beijing political parties fared manufacturing operations to the worst of all, as voters tended to sup- A troubling brain mainland and have set up substantial port more moderate candidates and research labs there, cutting-edge re- parties on both sides of the independ- drain and widening search still tends to be done here and ence issue — those who had taken in the United States, said Betty Lin, more pragmatic positions in favor of income disparities. the Taiwan research manager for preserving the status quo with Bei- IDC, a big information technology jing, and in some cases had taken an consulting company. interest in the economy instead of Domestic companies, multination- market, however, partly to match its concentrating solely on ideological als and the rest of the business com- weighting in global stock market av- differences. munity here have been united in de- erages. Voters “are in favor of a concilia- manding closer business links to Chi- Close to a million people from Tai- tory, stabilizing approach by both na and an end to lingering protection- wan have moved to the mainland, sides so that both sides can create a ism toward many goods from the most of them highly skilled manag- better, more competitive economy mainland. Working through the ers and workers from ages 30 to 50 , for Taiwan,” said Andrew Yang, the American Chamber of Commerce in a brain drain so great that both secretary general of the Chinese here, General Motors has been lob- multinational companies and those Council of Advanced Policy Studies, bying for an end to Taiwan’s restric- based in Taiwan struggle to find a nonprofit research group here. tions on imported Chinese auto parts, qualified employees here. “That truly will encourage more in- and Mars has sought to bring in “We now are faced with a shortage vestment.” mainland chocolate. of skilled labor — in the past, we Over the years, as many politi- Taiwan currently has import lim- were known for an endless supply of cians here focused on the emergence its on mainland goods in 15 percent of skilled labor,” said Hu Sheng-cheng, of an identity for Taiwan distinct the categories of industrial goods the chairman of Taiwan’s powerful and 35 percent of the food and agri- Council for Economic Planning and cultural categories. But it is review- Development. ing these restrictions and gradually Trade Migration Economic dependence on the removing some of them, said Huang Once dependent on the United mainland may someday limit Tai- Chih-peng, Taiwan’s director gen- States, Taiwan now exports twice wan’s political options, but it has also eral of foreign trade. as much to China as it does to produced considerable gains lately. As factories have moved to the America. Powered by exports, Taiwan’s econ- omy has been growing briskly for mainland and been replaced by hos- more than two years, interrupted pitals, banks, insurers and other TAIWAN TAIWAN only by a short, sharp drop in the service industries, income inequality EXPORTS IMPORTS spring of last year because of an out- has risen in what had been one of $50 billion break of severe acute respiratory Asia’s most egalitarian societies af- syndrome, or SARS. Unemployment ter the land reform that followed World War II. The ratio of average 40 TO THE has fallen steadily for the last two UNITED years, to 4.3 percent in October. incomes in the top 20 percent of the STATES income distribution to the bottom 20 Trade30 MigrationFROM THE To keep that expansion going, busi- percent has climbed to 6.07 to 1 this UNITED ness leaders here say they will need GET THE BLADE SERVERS OF TOMORROW TODAY. Once dependent on theSTATES United year, after hovering at 3 to 1 or 4 to 1 better trade and transportation links GET MORE OUT OF NOW. States,20 Taiwan now exports twice for many years. with the mainland. The ruling Demo- as much to China as it does to Retirees and people with limited TO CHINA* cratic Progressive Party says that it America.10 FROM skills in an increasingly high-technol- CHINA* can negotiate direct flights and di- ogy economy have been hurt the www.dell.com/blades10 • 1.800.934.4805 rect cargo shipments. 0 most, despite the recent economic Yet while candidates for the legis- TAIWAN TAIWAN gains. “In the past five years,” said ’90EXPORTS’95 ’00 ’03 ’90IMPORTS’95 ’00 ’03 lature have been mostly silent on Wu Chong-shia, a 74-year-old retired economic issues, senior policy mak- $50 billion engineer, “Taiwan’s economy has *Includes Hong Kong and Macao. ers in the administration of Presi- been going downhill.” Source:40 TO Taiwan THE Directorate General of Customs dent Chen have been quietly remov- GET THE BLADE SERVERS OF TOMORROW TODAY. UNITED ing some trade barriers. They have STATES GET MORE OUT OF NOW. 30 TheFROM New THE York Times been doing this partly to comply with UNITED Taiwan’s admission to the World STATES from20 that of China, the economy be- Trade Organization three years ago came ever more closely intertwined and partly to attract foreign invest- www.dell.com/blades10 • 1.800.934.4805 ors who want to maintain business with10 thatTO of CHINA*the mainland. FROM After decades of relying CHINA*mainly on networks spanning all of Asia. the0 American market to lift its 23 Taiwan passed a new and more million people out of poverty, Taiwan stringent copyright law this sum- now’90 finds’95 itself’00 ’03 exporting’90 ’95 twice’00 as’03 mer, delighting foreign recording much to China as to the United and publishing companies, and it is States.*Includes Foreign Hong Kong direct and investment Macao. in close to adopting a law protecting TaiwanSource: Taiwan has Directorate dropped General by more of Customs than pharmaceutical trade secrets — half in the last five years; the figure legislation sought by Merck and oth- GET THE BLADE SERVERS OF TOMORROW TODAY. is now less than a fifteenthThe New of Yorkthe Timestid- er pharmaceutical companies. Tai- GET MORE OUT OF NOW. al wave of money pouring into new wan’s police have been cracking factories, office buildings, shopping down on counterfeits; they have www.dell.com/blades10 • 1.800.934.4805 2

GET THE BLADE SERVERS OF TOMORROW TODAY. GET MORE OUT OF NOW.

www.dell.com/blades10 • 1.800.934.4805

GET THE BLADE SERVERS OF TOMORROW TODAY. GET MORE OUT OF NOW.

www.dell.com/blades10 • 1.800.934.4805 C M Y ID NAME: Nxxx,2004-12-13,C,007,Bs-4C,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

Taiwan Semiconductor Manufacturing Company A worker inspects a silicon wafer at a factory in Taiwan. Plants like this have been moving to the mainland.

Trade Migration Once dependent on the United States, Taiwan now exports twice as much to China as it does to America.

TAIWAN TAIWAN EXPORTS IMPORTS $50 billion

40 TO THE UNITED STATES 30 FROM THE UNITED STATES 20

10 TO CHINA* FROM CHINA* 0 ’90 ’95 ’00 ’03 ’90 ’95 ’00 ’03

*Includes Hong Kong and Macao.

Source: Taiwan Directorate General of Customs

The New York Times

3

GET THE BLADE SERVERS OF TOMORROW TODAY. GET MORE OUT OF NOW.

www.dell.com/blades10 • 1.800.934.4805 C M Y ID NAME: YTxx,2004-12-25,C,001,Bs-BK,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

BUSINESS

C M Y ID NAME: YTxx,2004-12-25,C,001,Bs-BK,E1 YELO MAG CYAN 3 7 15 25 50 75 85 93 97

SATURDAY, DECEMBER 25, 2004 Outsourcing to the U.S.

Remember When? Chinese Buyer of PC Unit Is Moving to I.B.M.’s Hometown BUSINESS Some children unwrapping presents today will find Disney Princesses or VideoNow Players, two of this year’s hot-selling toys. Music lovers may be giving or receiving copies of “Confessions,” Usher’s top-selling album. And families may slip copies of “Shrek 2,” this year’s most popular movie, into DVD players to watch the movie again. As popular as these things are, will they still be as popular in 10 and 20 years? Here are top- selling toys, albums and movies from 10 and 20 years ago. How well did they hold up?

POPULAR POPULAR POPULAR ALBUM TOY MOVIE

“The Sign,” Mighty “Forrest ’94 Ace of Morphin Gump” Base Power Rangers Reuters A customer in Shanghai checks the price of a Lenovo computer. Lenovo has purchased the personal computer unit of I.B.M. “Purple Masters “Beverly ’84 Rain,” of the Hills Prince Universe Cop” American multinational companies outsource manufacturing By DAVID BARBOZA to China. Why can’t a Chinese company outsource management to the United States? BEIJING — Inside the shimmering headquarters of the Leno- Executives at Lenovo — which gets about 98 percent of its $3 vo Group, China’s largest computer maker, workers are carting billion in revenue from China — are, in effect, acknowledging that birthday cakes over to three office cubicles. they do not have the necessary global experience to run the new These days, every employee here gets a birthday gift, some- company. thing a multinational company might be expected to do in this age “The most valuable asset we have acquired through I.B.M.’s of feel-good corporate management. PC business is its world-class management team and their exten- The problem is that people in China do not traditionally cele- sive international experience,” says Liu Chuanzhi, chairman of brate birthdays. Lenovo and one of the company’s founders. But that is changing. And so is Lenovo. It is trying to become a Indeed, few executives at Lenovo seem disappointed by the global company with its purchase of I.B.M’s personal computer move. In fact, many seem pleased to be buying into a blue-chip business for $1.75 billion, and handing out birthday cakes is just American corporation. The New York Times part of the process of evolving into a multinational corporation. After all, Lenovo — formerly known as Legend — may be the To further globalize the company, however, Lenovo will do biggest computer maker in China, but the company is still virtually something even bolder: it will move its headquarters to Armonk, unknown outside of Asia. N.Y., where I.B.M. is based, and essentially hand over manage- And top executives at Lenovo say they are eager to learn how ment of what will become the world’s third-largest computer mak- to run a global company from their new colleagues at the PC unit of er, after Dell and Hewlett-Packard, to a group of senior I.B.M. ex- ecutives. Continued on Page 2

Remember When? Some children unwrapping presents today will find Disney Princesses or VideoNow Players, two of this year’s hot-selling toys. Music lovers may be giving or receiving copies of “Confessions,” Usher’s top-selling album. And families may slip copies of “Shrek 2,” this year’s most popular movie, into DVD players to watch the movie again. As popular as these things are, will they still be as popular in 10 and 20 years? Here are top- selling toys, albums and movies from 10 and 20 years ago. How well did they hold up?

POPULAR POPULAR POPULAR ALBUM TOY MOVIE

“The Sign,” Mighty “Forrest ’94 Ace of Morphin Gump” Base Power Rangers

“Purple Masters “Beverly ’84 Rain,” of the Hills Prince Universe Cop”

The New York Times ID NAME: Nxxx,2004-12-25,C,002,Bs-BW,E2 3 7 15 25 50 75 85 93 97

Chinese Buyer of PC Unit Ernst & Young to Pay U.S. Is Moving to I.B.M.’s Town Over Bank Collapse in ’01

lysts say. It was one of the first com- HINSDALE, Ill., Dec. 24 (AP) — scores our commitment to work co- Continued From First Business Page panies here to list its shares in Hong The accounting firm Ernst & Young operatively with regulators and to Kong. It was among the first to re- has agreed to pay $125 million to the ensure that we have the strongest I.B.M., which operates in more than ward its employees with stock op- Federal Deposit Insurance Corpora- policies and procedures to serve our 150 countries and had $9 billion in tions, which have turned some of its tion over the collapse of a suburban clients and the public interest.” revenue in 2003. top executives into millionaires. Chicago bank three years ago, the The Ernst & Young agreement in- Preparations are already under The company’s identity was F.D.I.C. announced Friday. volved two settlements: one for $40 way in Beijing. For the last few shaped, in part, by its visionary The failure of Superior Bank, million with the F.D.I.C. and another months, all vice presidents have chairman, Mr. Liu, who in 1984 based in Hinsdale, cost the F.D.I.C. for $85 million involving enforce- been required to study English for at helped found Lenovo with a group of about $700 million, making it one of ment claims by the Treasury’s Of- least one hour a day. The chairman scientists from the Chinese Academy the largest federally insured finan- fice of Thrift Supervision, which says he has read books about Bill of Sciences. cial institutions to fail in a decade. closed Superior on July 27, 2001. The Gates and Andrew Grove. And the Early on, it was the hard-charging Investigators for the Treasury De- F.D.I.C. said that it would receive chief executive of Lenovo has agreed Mr. Liu who persuaded the Chinese partment, the F.D.I.C. and Congress both amounts. to give up day-to-day management of government to give the company blamed the risky business strategies “We still expect to lose money be- the company to assume the role of greater control over its hiring and of Superior’s management for the cause of this failure, but this will go a chairman. salary decisions, allowing the state- collapse, but they also cited failures long way in recouping as much as His task will be to fly back and owned company to raise capital from on the part of Superior’s outside au- possible,” an F.D.I.C. spokesman, diting firm, Ernst & Young. The forth from Beijing to New York to outside investors and essentially op- David Barr. He said some of the set- F.D.I.C. accused the firm of negli- tlement would eventually reach unin- consult with Lenovo’s newly named erate like a private company. gence and concealing the bank’s true sured depositors who lost money in chief executive, Stephen M. Ward Jr., Later, Mr. Liu won government financial conditions. Superior’s collapse. the senior vice president and general approval to list the company’s stock 3 7 15 25 50 75 85 93 97 Under the agreement announced Superior Bank claimed about $2.3 manager of I.B.M.’s Personal Sys-ID NAME:in Hong Kong Nxxx,2004-12-25,C,002,Bs-BW,E2 and for Lenovo to start 3 7 15 25 50 75 85 93 97 Friday, Ernst & Young did not admit billion in assets at the time and was tems Group. ID NAME:producing Nxxx,2004-12-25,C,002,Bs-BW,E2 its own computers, rather 3 7 15 25 50 75 85 93 97any liability. owned by the multibillionaire Pritzk- ID NAME:Many analysts Nxxx,2004-12-25,C,002,Bs-BW,E2 were surprised by than simply marketing Western brands. A spokesman for Ernst & Young, er family and a New York developer. Charles Perkins, said the firm had By 1997, with its own brand of low- The Pritzkers agreed to a $460 mil- already made changes to its auditing cost Chinese-character-friendly lion voluntary settlement in 2001 that practices, including adding more computers, Lenovo was suddenly barred government action against A new work agenda: technical resources and increasing the owners. The owners admitted no China’s biggest computer maker. its requirements for training and ex- liability. So far, the Pritzkers have Mr. Liu, a military academy grad- Miranda Mimi Kuo for The New York Times studying English and perience. paid about $175 million under the set- uate who suffered through China’s Liu Chuanzhi, chairman of Lenovo and one of its founders, said that ac- Chinese Buyer of PC Unit Ernst“Our decision &to reach Young these settle- tlement’s to Pay payment U.S. schedule, Mr. brutal Cultural Revolution, said he quiring the international business skills of I.B.M. managers was one of Chinesehanding out birthday Buyer of PC Unit Ernstments,” Mr. Perkins& Young said, “under- Barr to said. Pay U.S. Chinese Buyer of PC Unit often ran the company with an iron the big attractions of the deal for the personalErnst computer & division. Young to Pay U.S. cakes.Is Moving to I.B.M.’sfist, scolding workers Town who showed up Over Bank Collapse in ’01 late for meetings and pushing scien- Is Moving to I.B.M.’s Town In recent years, Lenovo officials roster that includes Goldman, Over Bank Collapse in ’01 tists and executives to deliver on lysts say. It was one of the first com- say the company’s corporate culture Sachs; McKinsey & Company, the HINSDALE, Ill., Dec. 24 (AP) — scores our commitment to work co- Is Moving to I.B.M.’s Town their promises. Over Bank Collapse in ’01 Continued From First Business Page lystspanies say. here It wasto list one its of shares the first in com-Hong has evolved from what some compa- consulting firm; Weil, Gotshal & BirdsTheHINSDALE, accounting and Ill., firm Dec. Ernst 24Dancing & (AP) Young — scoresoperatively our Ladies commitment with regulators to work and co- to Lenovo’s decision to outsource its “All the people were scientists in Continued From First Business Page paniesKong. Ithere was to amonglist its shares the first in Hong to re- ny officials called the “semimilitary” Manges,HINSDALE, the New Ill., York Dec. law 24 firm; (AP) and — Thescoreshas accountingagreed our commitmentto pay firm $125 Ernst million to & work Young to the co- operativelyensure that with we have regulators the strongest and to lystsmanagement say. It was to New one ofYork. the first com- those days,” Mr. Liu recalled. “They Continued From First Business Page I.B.M., which operates in more than Kong.ward Itits was employees among the with first stock to re-op- culture that prevailed in the early TheOgilvy, accounting the public firm relations Ernst firm. & Young hasoperativelyFederal agreed Deposit to with pay Insurance regulators$125 million Corpora- and to the to ensurepolicies thatand procedures we have the to strongestserve our panies“I admire here to what list its Lenovo shares is in doing,” Hong were very casual. They’d always be I.B.M.,150 countries which operates and had in $9 more billion than in wardtions, its which employees have turned with some stock of op- its days, to a more easy-going and hip hasAnd agreed the new to pay language $125 million for the to com- the FederalensureSkewtion over thatDeposit the wecollapse the Insurance have of the ‘12a strongestsuburbanCorpora- Days’policiesclients and and Index the procedures public interest.” to serve our Kong.said Joe It wasZhang, among a UBS the analyst first to who re- late for meetings and they’d make I.B.M., which operates in more than 150revenue countries in 2003. and had $9 billion in tions,top executives which have into turned millionaires. some of its high-tech culture. Federalpany is Deposit English, Insurance company Corpora- officials tionpoliciesChicago over and bankthe procedures collapse three yearsof toa suburbanserve ago, our the clientsThe andErnst the & public Young interest.” agreement in- wardfollows its Lenovo. employees “Many with Lenovo stock exec- op- their promises. So we decided that if 150 countries and had $9 billion in revenuePreparations in 2003. are already under topThe executives company’s into millionaires. identity was These days, Lenovo’s new corpo- tionsay. over the collapse of a suburban ChicagoclientsF.D.I.C. and announced bank the public three Friday. interest.” years ago, the basedvolvedThe Ernst twoprice settlements:& differentials.Young agreement one Swans,for $40in- tions,utives whichhave decidedhave turned to do somethis atof theits anyone was late they’d stand up for revenue in 2003. wayPreparations in Beijing. are For already the last under few shaped,The company’s in part, by identity its visionary was rate headquarters in Beijing’s “Sili- ChicagoLenovo bank officials three sayyears they ago, arethe F.D.I.C.The ByErnst announced failure ELIZABETH & Young of Friday. Superior agreement OLSON Bank, in- volveddoves,million twopartridgeswith settlements: the F.D.I.C. and calling and one another for birds $40 topexpense executives of their into millionaires. careers. They’re one minute.” Preparations are already under waymonths,The in Beijing.company’s all vice For presidents identity the last have wasfew shaped,chairman, in Mr. part, Liu, by its who visionary in 1984 con Suburb” is teaming with young F.D.I.C.studying announced American Friday.business history, volvedbasedThe in two failure Hinsdale, settlements: of costSuperior the one F.D.I.C. for Bank, $40 million(today’sfor $85 with million canaries) the F.D.I.C. involving cost and about enforce-another the putting personal ego behind for the Along the way, Mr. Liu also about $700 million, making it one of ment claims by the Treasury’s Of- way in Beijing. For the last few months,shaped,been required inall part, vice to study by presidents English its visionary for have at chairman,helped found Mr. Lenovo Liu, with who a group in 1984 of 20- and 30-somethings, casually andThe the chief failure executive of Superior lists The Bank, Har- basedmillionWASHINGTON, in with Hinsdale, the F.D.I.C. Dec. cost 24 theand — F.D.I.C.another Maids- forsame $85 as last million year, involving according enforce-to infor- greater good of the company.” groomed a cadre of loyal and fierce the largest federally insured finan- fice of Thrift Supervision, which months, all vice presidents have beenchairman,least required one hour Mr. to a study Liu, day. TheEnglish who chairman in for 1984 at helpedscientists found from Lenovo the Chinese with a Academy group of dressed, chattering into mobile basedvard Business in Hinsdale, Review cost as the part F.D.I.C. of his aboutfora-milking, $85 $700 million gold million, rings involving making and turtledoves it enforce- one of mentmation claims from theby the Cincinnati Treasury’s Zoo and Of- People involved in the negotiations executives, including Yang Yuanq- thecial largestinstitutions federally to fail in insured a decade. finan- ficeclosed of Superior Thrift on Supervision, July 27, 2001. which The been required to study English for at leasthelpedsays one he found has hour Lenovo read a day. books with The a aboutchairman group Bill of scientistsof Sciences. from the Chinese Academy phones and looking confident. aboutregular $700 reading. million, making it one of mentwere a claims relative by bargain the Treasury’s this year, but Of- Botanical Gardens. with I.B.M. said that Lenovo officials ing, 42, who is now the company’s cialInvestigators institutions to for fail the in Treasury a decade. De- closedF.D.I.C. Superior said that on July it would 27, 2001. receive The least one hour a day. The chairman saysscientistsGates he and has from Andrew read the Chinese books Grove. about Academy And Bill the of Sciences.Early on, it was the hard-charging The halls are decked with employ- theIn largest fact, like federally other computerinsured finan- and ficeanyone of whoThrift shopped Supervision, for French which But the price of French hens, saw no other choice. They recognized chief executive, and Mary Ma, 52, partment,Investigators the F.D.I.C. for the Treasuryand Congress De- F.D.I.C.both amounts. said that it would receive says he has read books about Bill Gatesofchief Sciences. executive and Andrew of Lenovo Grove. has And agreed the Mr.Early Liu on, who it persuadedwas the hard-charging the Chinese ee recognition plaques, business cialsoftware institutions giants, to Lenovo fail in a is decade. even fan- closedhens, geese Superior and onladies July dancing27, 2001. mayThe which are a slightly more exotic ver- that Lenovo could not simply take Lenovo’s highly respected chief fi- partment,blamed the the risky F.D.I.C. business and strategiesCongress both“We amounts. still expect to lose money be- Gates and Andrew Grove. And the chiefto Earlygive executive up on, day-to-day it was of Lenovo the management hard-charging has agreed of Mr.government Liu who persuaded to give the the company Chinese school theorems and New Age philos- ningInvestigators its own myths. for theIn 1984,Treasury the com- De- F.D.I.C.have been said in thatfor a it touch would of receive sticker sion of American hens, went up 200 over a much bigger I.B.M. PC unit nancial officer. blamedof Superior’s the risky management business strategies for the cause“We ofstill this expect failure, to butlose this money will gobe- a chief executive of Lenovo has agreed toMr.the give companyLiu up who day-to-day persuaded to assume management the the Chinese role of of governmentgreater control to giveover itsthe hiring company and ophy: “Happiness,” reads one work- partment,pany was the formed F.D.I.C. in aand small, Congress con- bothshock. amounts. percent, Mr. Kleintop said, largely and run it from Beijing. But just how the new company’s place poster. “Work hard and live blamedcrete security the risky guard’s business booth strategies that be- ofcollapse, Superior’s but they management also cited forfailures the causelong wayof this in failure, recouping but this as muchwill go asa to give up day-to-day management of thegovernmentchairman. company to to assumegive the the company role of greatersalary decisions, control over allowing its hiring the state- and “WeSo said still PNC expect Advisors, to lose themoney wealth be- because American breeders of That is why a major theme of the management will take shape in Bei- art,” reads another. ofcame Superior’s its first management laboratory and for head- the collapse,causeon the of part thisbut of failure,they Superior’s also but cited this outside willfailures go au- a longpossible,” way in an recouping F.D.I.C. as spokesman, much as the company to assume the role of chairman.greaterHis task control will over be to its fly hiring back and salaryowned decisions,company to allowing raise capital the state- from management firm that each year tal- French hens introduced a more ex- talks was how to keep business as jing and New York is still unclear. Newcomers to Lenovo are even collapse,quarters. but they also cited failures onlongditing the way part firm, in of recouping ErnstSuperior’s & asYoung. outside much Theau- as possible,”David Barr. an He F.D.I.C. said some spokesman, of the set- chairman. salaryforthHis from task decisions, will Beijing be allowing to to fly New back the York state- and to ownedoutside company investors to and raise essentially capital from op- lies the putative cost of assembling pensive variety. usual after the deal was completed, Though he will step down after the trained in the same kind of team- onThe the part booth of — Superior’s part of theoutside Chinese au- ditingpossible,”F.D.I.C. firm, accused an Ernst F.D.I.C. the & firm Young. spokesman, of negli- The Davidtlement Barr. would He eventually said some reach of the unin- set- His task will be to fly back and forthownedconsult from company with Beijing Lenovo’s to raise to New newly capital York named from to outsideerate like investors a private and company. essentially op- all the items from the song “12 Days PNC Advisors’ news release elabo- those people say. merger, Mr. Liu, 60, will continue to work programs that can be found at ditingAcademy firm, of ErnstSciences & — Young. was torn The F.D.I.C.Davidgence andBarr. accused concealing He said the some the firm bank’s of of the negli- trueset- tlementsured depositors would eventually who lost reach money unin- in forth from Beijing to New York to consultoutsidechief executive, withinvestors Lenovo’s Stephen and essentially newly M. Ward named Jr.,op- erateLater, like a Mr. private Liu company. won government of Christmas.” This year, all those rated: “The price for French hens While I.B.M. is full of M.B.A.’s, serve as a member of the board. American business schools, right F.D.I.C.down in 2001 accused to make the way firm for of a negli- new gencetlementfinancial and would conditions. concealing eventually the bank’sreach unin- true suredSuperior’s depositors collapse. who lost money in consult with Lenovo’s newly named chieferatethe senior executive, like a vice private president Stephen company. M. and Ward general Jr., approvalLater, Mr.to list Liu the won company’s government stock goods and services would have set a and geese saw significant increases, Lenovo — which is still partly gov- Mr. Yang, a serious-minded execu- down to the leaps of faith — the back- gencebuilding. and But concealing it was soon the bank’srebuilt trueand financialsuredUnder depositors conditions. the agreement who lost announced money in Superior’sSuperior collapse. Bank claimed about $2.3 chief executive, Stephen M. Ward Jr., themanagerLater, senior Mr.vice of I.B.M.’s Liupresident won Personal governmentand general Sys- approvalin Hong Kong to list and the for company’s Lenovo to stock start buyer back $66,334, about the cost of which may be due to fewer hatch- ernment owned — has only two tive who helped fire up the compa- ward falling employee who is caught financialnow sits like conditions. an empty artifact along- Superior’sFriday,Under Ernst the collapse. agreement& Young did announced not admit billionSuperior in assets Bank at claimed the time about and $2.3was the senior vice president and general managerapprovaltems Group. to of list I.B.M.’s the company’s Personal stock Sys- inproducing Hong Kong its andown for computers, Lenovo to rather start 3 7 15 25 50 75 85 93 97a fully loaded sport utility vehicle. lings during this breeding cycle cre- members of the senior management ny’s sales force, will become chair- by a team of supportive co-workers. sideUnder the theheadquarters agreement of announced Lenovo’s Friday,anySuperior liability. Ernst Bank & Young claimed did aboutnot admit $2.3 billionowned inby assets the multibillionaire at the time and Pritzk- was manager of I.B.M.’s Personal Sys-ID NAME:temsin ManyHong Group. Kong analysts Nxxx,2004-12-25,C,002,Bs-BW,E2 and for were Lenovo surprised to start by producingthan simply its own marketing computers, Western rather ating an imbalance in the supply- team with an M.B.A. And none of the man. Ms. Ma, who led the talks to ac- Friday,parent company, Ernst & Young did not admit. anyThatA liability. spokesman is a record for price Ernst for & the Young, 364 owneder family by theand multibillionaire a New York developer. Pritzk- producingMany analysts its own werecomputers, surprised rather by thanbrands. simply marketing Western And for those who need a jolt, each Legend Holdings billion in assets at the time and was tems Group. top executives have ever worked for quire I.B.M.’s PC unit, is expected to tokensCharlesA spokesman of Perkins, affection for said Ernst ranging the & firm fromYoung, had a erdemand familyThe Pritzkers chain.and a New Turtledoves,agreed York to developer. a $460 on mil- the than simply marketing Western brands.By 1997, with its own brand of low- morning at 8:30 the Lenovo theme anyCritics liability. now worry that Lenovo owned by the multibillionaire Pritzk- Many analysts were surprised by a multinational corporation. remain as chief financial officer. Charlespartridgealready made Perkins, in a changes pear said tree theto its to firm auditing a dozen had otherlionThe voluntary Pritzkers hand, may settlement agreed have to had ina $460 2001 a more mil-that brands. costBy 1997, Chinese-character-friendlywith its own brand of low- song is broadcast on loudspeakers mustA spokesman find a way forto preserve Ernst & I.B.M.’s Young, er family and a New York developer. But analysts also say that Lenovo Lenovo’s challenge will be to meld throughout the headquarters, urging Charlestraditions Perkins, in a PC said industry the firm of had in- alreadydrummerspractices, made drumming. including changes toaddingStill, its auditingthe more cost lionfruitfulbarred voluntary breedinggovernment settlement cycle, action creatingin 2001 against that an By 1997, with its own brand of low- costcomputers, Chinese-character-friendly Lenovo was suddenly The Pritzkers agreed to a $460 mil- isA no new pushover. work The company agenda: is con- radically different corporate cul- workers to guide the corporate ship alreadycreasing made competition changes andto its commod- auditing practices,lionistechnical up voluntary only resources slightly, including settlement 1.6 and adding percent, in increasing 2001 more overthat barredoversupplythe owners. government ofThe birds owners and action aadmitted 31 againstpercent no cost Chinese-character-friendly computers,China’s biggest Lenovo computer was maker. suddenly decline in price.” Asidered new one work of China’s agenda: most success- tures. through perilous waters. practices,ity manufacturing.Miranda including Mimi Kuo for addingThe New York more Times technicallastits requirements year’s resources total, andfor training andcompared increasing and with ex- theliability. owners. So The far, owners the Pritzkers admitted have no computers, Lenovo was suddenly China’sMr. Liu, biggest a military computer academy maker. grad- barred government action against A new work agenda: fulstudying corporations. English For years, and for ex- “Neither culture should be the de “Lenovo, Lenovo, Lenovo,” one line technicalBut Mr.Miranda resources Yang, Mimi Kuo Lenovo’s for and The New increasing York current Times itstheperience. requirements 1984owners. total, The is 5.9 ownersfor percent training admitted higher. and ex- no liability.paidThe about release So $175 far, continued,million the Pritzkers under “All the have told, set- China’s biggest computer maker. uateMr. whoLiu, a suffered military through academy China’s grad- Liu Chuanzhi, chairman of Lenovo and one of its founders, said that ac- studyingample, Lenovo’s English brand has and outsold facto culture,” said Martin Gilliland, goes, “we are sailing through the itschief requirements executive, says for trainingnot to worry. and ex- perience.liability.PNC“Our decision Advisors, So far, to the areach unit Pritzkers these of the settle- havePNC paidthetlement’s cost about of $175the payment birds million in schedule, theunder Christmas the set- Mr. Mr. Liu, a military academy grad- uatebrutal who Cultural suffered Revolution, through China’s said he Liuquiring Chuanzhi,Miranda the international Mimi chairman Kuo for The New of business YorkLenovo Times skills and one of I.B.M.of its founders, managers said was that one ac- of studying English and Dell,handing Hewlett-Packard out birthday and I.B.M. an analyst at Gartner Research. waves to lands far away. Lenovo, perience."We are going to stick to the princi- paidFinancialments,”“Our about decision Mr. Services $175 Perkins millionto reach Group, under said, these the “under-the settle- Pitts- set- tlement’sBarr said. payment schedule, Mr. uate who suffered through China’s brutalLiuoften Chuanzhi, ran Cultural the company chairman Revolution, with of saidLenovo an iron he andquiringthe one big of attractionsthe its international founders, of the said dealbusiness that for ac- the skills personal of I.B.M. computer managers division. was one of Chinese Buyerhandingcomputers of PC in China.out Unitbirthday “They have to start a new one. Can Lenovo, Lenovo. We are building a plesErnst“Our of decision I.B.M. asto& reach a high-premium,Young these settle- ments,”tlement’sburgh-based to Mr.Pay payment Perkins banking U.S. schedule, said, company, “under- Mr. Barr said. brutal Cultural Revolution, said he oftenquiringfist, scolding ran the the international workers company who with showedbusiness an iron up skillsthe ofbig I.B.M. attractions managers of the was deal one for ofthe personal computer division. handing out birthday cakes.And even though it began as a they develop a new Lenovo business new splendor.” ments,”high-value Mr. image, Perkins “ he said, said. “under- “We’re Barrstarted said. tabulating the gift package often ran the company with an iron fist,late scoldingfor meetings workers and who pushing showed scien- up cakes.state-owned enterprise, Lenovo has theculture? big attractions That’s one of ofthe the deal keys for the to personalLenovoIn recent computer is also years, seeking division. Lenovo the best officials out- notroster going thatto make includes any compromises Goldman, two decades ago to see whether the fist, scolding workers who showed up latetists for and meetings executives and pushing to deliver scien- on All 364 items in that cakes.Is Moving to I.B.M.’salways been entrepreneurial, Town ana- success.” sidesayIn theadvice recent company’s it years, can get, corporate Lenovo hiring officials aculture client rosteronSachs;Over this." McKinsey that Bank includes & Company, Goldman, Collapse the costs of the presents in in’01 the English late for meetings and pushing scien- tiststheir andpromises. executives to deliver on In recent years, Lenovo officials sayrosterhas theevolved company’s that from includes what corporate some Goldman, culturecompa- Sachs;consulting McKinsey firm; &Weil, Company, Gotshal the & carolBirds tracked theand United StatesDancing gov- song for Ladies $66,334, up tistsLenovo’s and decision executives to to outsource deliver onits their“All promises. the people were scientists in lysts say. It was one of the first com- say the company’s corporate culture hasSachs;ny officials evolved McKinsey called from whatthe & “semimilitary” Company, some compa- the consultingManges,HINSDALE, the firm; New Ill., York Weil, Dec. law Gotshal24 firm; (AP) and &— Birdsernment’sscores our Consumercommitment and Price toDancing work Index. co- Ladies Lenovo’stheirmanagement promises. decision to New to York. outsource its those“All days,” the people Mr. Liu were recalled. scientists “They in Continued From First Business Page panies here to list its shares in Hong has evolved from what some compa- nyconsultingculture officials that called firm; prevailed the Weil, “semimilitary” in Gotshal the early & Manges,BirdsOgilvy,The accounting the the public New and firm York relations Ernst law Dancing firm;firm. & Young and Theoperatively general Ladies conclusion with regulators the firm and has to 1.6% for the year. Lenovo’s decision to outsource its management“All“I admire the people whatto New were Lenovo York. scientists is doing,” in thosewere days,”very casual. Mr. Liu They’d recalled. always “They be Kong. It was among the first to re- ny officials called the “semimilitary” cultureManges,days, to that the a more New prevailed York easy-going law in thefirm; and early and hip Ogilvy,hasAnd agreed thethe newpublic to pay language relations $125 million for firm. the to com- the drawnSkewensure is that that they we the have usually the ‘12 do. strongest Days’ Index management to New York. thosesaid“I admire Joedays,” Zhang, Mr. what aLiu Lenovo UBS recalled. analyst is doing,” “They who werelate forvery meetings casual. They’d and they’d always make be I.B.M., which operates in more than Twoward its employees Patents with stock Lead op- culture to that prevailedNumerous in the early days,Ogilvy,high-techLawsuits to the a culture. morepublic easy-goingrelations Aimed firm. and hip panyFederal Andat isthe Deposit English,Banks new language Insurance company for theCorpora- officials com- SkewpoliciesThis year and PNC procedures the Advisors ‘12to found serve that Days’our Index “I admire what Lenovo is doing,” saidwerefollows Joevery Lenovo. Zhang, casual. “Many a They’d UBS Lenovo analyst always exec- who be latetheir for promises. meetings So andwe decided they’d that make if 150 countries and had $9 billion in tions, which have turned some of its days, to a more easy-going and hip high-techAndThese the days,culture. new language Lenovo’s for new the corpo- com- panySkewsay.tion over is English, the collapsethe company of ‘12a suburban officials Days’theclients prices and Index wentthe public up in interest.” the low single based price differentials. Swans, said Joe Zhang, a UBS analyst who followslateutives for haveLenovo. meetings decided “Many and to Lenovodo they’d this at makeexec- the theiranyone promises. was late So they’d we decided stand thatup for if revenue in 2003. top executives into millionaires. high-techDallas Business culture. Journal, which panyground,rateThese headquarters is butEnglish,days, they Lenovo’s companydo in assert Beijing’s new officials that corpo- “Sili- he say.ChicagoTheLenovo DataTreasury bank officials three suits say years have they ago, cast are the digitsTheBy Ernst on ELIZABETH a & percentage Young agreementOLSON basis forin- basedclassicdoves, totaled partridgesprice differentials.$4,201, and just calling 1.5 percent Swans, birds follows Lenovo. “Many Lenovo exec- utivestheirexpenseContinued promises. have of From decided their So First we careers. to Businessdecided do this They’re thatat Page the if anyoneone minute.” was late they’d stand up for Preparations are already under The company’s identity was DataTreasuryThese days, has Lenovo’s linked new to its corpo- Web ratesay.metcon Suburb”headquarters at least onceis teaming inwith Beijing’s people with young “Sili-from anstudyingF.D.I.C.Lenovo unusually announced American officials wide net. Friday.business say Zions they Bancor-history, are basedgoodsvolved By and pricetwo ELIZABETH remained settlements: differentials. steady OLSON one for Swans, for serv- $40 doves,more(today’s than partridges canaries) the $4,138 and cost it calling would about birds have the utives have decided to do this at the expenseanyoneputting was personal of late their they’d ego careers. behind stand They’re forup for the oneAlong minute.” the way, Mr. Liu also cost a year ago.” way in Beijing. For the last few shaped, in part, by its visionary ratesite, said headquarters it was $50,000. in Beijing’s “Sili- conJ.20-Lenovo P. Suburb”Morgan and 30-somethings,officials isChase teaming and say that with they casuallythey young areap- studyingporation,andThe theBy chief failure AmericanELIZABETHfor example,executive of business Superior whose OLSONlists The history, NetDe- Bank, Har- doves,ices.millionWASHINGTON, partridgeswith the F.D.I.C. andDec. calling24 and — anotherMaids- birds (today’ssame as last canaries) year, according cost about to infor- the expense of their careers. They’re puttingonegreater minute.” personalgood of the ego company.” behind for the groomedAlong thea cadre way, of loyal Mr. and Liu fierce also propriated his ideas. Mr. Kleintop said the trumpeter months, all vice presidents have achairman, patent on an Mr. aspect Liu, of who the process, in 1984 conAs Suburb” for RDM, is DataTreasury teaming with issued young 20-studyingdressed, and American chattering30-somethings, business into casually history, mobile andpositvardbased the Business subsidiaryinchief Hinsdale, executive Review sells cost listsas the part electronic The F.D.I.C. of Har- his (today’sa-milking,forWASHINGTON,The $85 flat millioncanaries) gold prices rings involvingDec. for cost and services,24 turtledoves about— enforce-Maids- theac- samemation as fromlast year, the Cincinnatiaccording to Zoo infor- and putting personal ego behind for the greaterbutAlongPeople “even good involved the that of way,the arcane incompany.” the Mr. featurenegotiations Liu may also groomedexecutives, a cadre including of loyal Yang and Yuanq-fierce dressed,phonesThe list and of chattering looking DataTreasury’s confident. into defend- mobile checkregular processing reading. technology, has in- swans could now and then really jolt been required to study English for at helped found Lenovo with a group of 20-a news and release 30-somethings, saying that the casually Cana- and the chief executive lists The Har- vardaboutWASHINGTON, Business $700 million, Review Dec. making as 24 part — it Maids- oneof his of a-milking,samecordingwerement aas claimsrelative last to gold the year, by ringsbargain group’s theaccording and Treasury’s this chief turtledoves year, to invest- infor- but Of- mationBotanical from Gardens. the Cincinnati Zoo and greater good of the company.” groomedbewithPeople something I.B.M. involveda cadresaid that that of inhas theloyalLenovo been negotiations and doneofficials fierce be- executives,ing, 42, who including is now the Yang company’s Yuanq- phonesantsThe appears hallsand looking are somewhat decked confident. withrandom, employ- giv- tervenedtheIn largest fact, on like federally behalf other computer ofinsured Electronic finan- and fice of Thrift Supervision, which the index, because breeding cycles least one hour a day. The chairman scientists from the Chinese Academy dressed,dian company chattering would pay into a feemobile for vard Business Review as part of his regulara-milking, reading. gold rings and turtledoves weremationmentanyone a strategist, relative from who the shoppedbargain Jeff Cincinnati Kleintop, this for year, Zoo Frenchreflect andbut BotanicalBut the Gardens. price of French hens, People involved in the negotiations withexecutives,fore,”saw noI.B.M. he other said. said including choice. “Patent that TheyLenovo officers Yang recognized officials Yuanq- aren’t ing,chief 42, executive, who is now and the Mary company’s Ma, 52, eneeThe that recognition halls all are major decked plaques, banks with engage businessemploy- in Datasoftwarecial institutions Systems, giants, saying to Lenovo fail inthat ais decade. iteven and fan-not closed Superior on July 27, 2001. The vary and affect the price. In 1984, for says he has read books about Bill of Sciences. phoneseach check and looking imaging confident. terminal it de- regular reading. wereIn fact,a relative like bargain other computer this year, andbut anyoneBotanicalanhens, hourly geese who Gardens.compensation and shopped ladies dancing foranchored French may by whichBut are the a priceslightly of more French exotic hens, ver- with I.B.M. said that Lenovo officials sawing,necessarilythat no 42, Lenovo other who experts. choice. iscould now Theynot Almost the simply recognized company’s certain- take chiefLenovo’s executive, highly and respected Mary chiefMa, 52, fi- eecheckschool recognition theorems imaging and plaques, New archiving, Age business philos- and DataTreasuryningInvestigators its own myths. developed for theIn 1984, Treasury the the system com- De- F.D.I.C. said that it would receive instance, the seven swans-a-swim- Gates and Andrew Grove. And the Early on, it was the hard-charging ploysThe andhalls “aare per-clickdecked with royalty employ- for In fact, like other computer and softwareanyone whogiants, shopped Lenovo foris even French fan- hens,ahave staticBut geese been theminimum in andprice for ladies awage of touch French dancing and of the sticker hens,may out- whichsion of are American a slightly hens, more went exotic up ver- 200 saw no other choice. They recognized thatchiefly,over if Lenovoa they executive, much were could bigger aware and not I.B.M. Mary simply of this, PCMa, take they unit 52, Lenovo’snancial officer. highly respected chief fi- schoolthatophy: myriad theorems“Happiness,” companies and Newreads handle Age one philos- creditwork- ningthatpanypartment, E.D.S.its was own theuses. formed myths. F.D.I.C. In in 1984, aand small, theCongress com- con- both amounts. ming called for in the song cost $1,000 chief executive of Lenovo has agreed Mr. Liu who persuaded the Chinese eestorage recognition of electronic plaques, documents business and software giants, Lenovo is even fan- hens, geese and ladies dancing may havewhichsourcingshock. been are of a inunskilled slightly for a touchmore labor. exotic of sticker ver- sionpercent, of American Mr. Kleintop hens, said, went largely up 200 that Lenovo could not simply take overLenovo’swouldn’tand run a much it allow highlyfrom bigger someoneBeijing. respected I.B.M. to get chiefPC a unitpat- fi- nancialBut justofficer. how the new company’s ophy:cardplace transactions.“Happiness,” poster. “Work Amongreads hard one them and work- liveare panycreteblamed“The wassecurity idea the formed riskyof guard’selectronic business in abooth small, check strategies that con-pro- be- “We still expect to lose money be- to give up day-to-day management of government to give the company schoolcheck theorems information, and New calculated Age philos- at ning its own myths. In 1984, the com- have been in for a touch of sticker shock.sionHence,So of said American the PNC eight Advisors, hens, maids-a-milking, went the wealthup 200 percent,each,because but Mr. Americanin Kleintop subsequent breederssaid, years largely the of over a much bigger I.B.M. PC unit andnancialentThat onrun it.” officer.isit fromwhy aBeijing. major theme of the managementBut just how will the take new shape company’s in Bei- placeViewpointeart,” reads poster. another.Archive “Work Services hard and, a com- live cretecessingcameof Superior’s security its is first quite guard’s managementlaboratory old, andbooth and there’s that for head- be- the a cause of this failure, but this will go a the company to assume the role of greater control over its hiring and ophy:around “Happiness,” a 50 percent royaltyreads one rate.” work- pany was formed in a small, con- shock. percent,whomanagementSo earnedsaid Mr. PNC $26.80 firm Kleintop Advisors, that for each said,the the chore year largelywealth tal- 20 becausepriceFrench of hens American the introduced long-necked breeders a more birds ex- of and run it from Beijing. talksThatButA new was justis why how how check a to themajor keep processing new theme business company’s of law,the as managementplacejing and poster. New Yorkwill “Work take is still hard shape unclear. and in Bei- live art,”cretepanyNewcomers reads security set up another. by guard’s to some Lenovo booth major are that banks even be- camegreatquarters.collapse, its deal firstbut of they laboratory prior also art cited associatedand failures head- long way in recouping as much as slumped. Since 2001, the price has chairman. salary decisions, allowing the state- Before Affiliated Computer set- So said PNC Advisors, the wealth managementbecauseyearslies the ago, putative Americanput firm a buyer cost that out ofeach breeders assemblingonly year $41.20 tal- of Frenchpensive hensvariety. introduced a more ex- That is why a major theme of the talksmanagementknownusual was afteras Check how the will to deal21, take keep raised was shape business completed, the in hopes Bei- as jingart,”Though and reads New he another. Yorkwill step is still down unclear. after the cameandtrainedNewcomers I.B.M. its in first to the store laboratoryto same Lenovo and kind retrieve and are of team-head- evendigi- quarters.withonThe the the boothpart patent,” of — Superior’s part said of John the outside J.Chinese Feld- au- possible,” an F.D.I.C. spokesman, His task will be to fly back and owned company to raise capital from tled, it did answer the lawsuit in management firm that each year tal- liesFrenchtoday,all the the atitems putativehens $5.15 from introducedan hour. cost the ofsong assembling a more “12 Days ex- pensiverisen,PNC to Advisors’variety. $500 each. news Every release year, elabo- PNC talks was how to keep business as usualjingofthose DataTreasury and people after New the say. York deal and is wasstill other unclear. completed, such pat- merger,ThoughNewcomers Mr. he willLiu, to step 60, Lenovo will down continue areafter even the to trainedquarters.talwork images programs in of the checks same that for can kind large be of found banks; team- at haus,AcademyditingThe a booth firm, lawyer of — SciencesErnst part representing of& — theYoung. was Chinese Zions, torn The David Barr. He said some of the set- forth from Beijing to New York to outside investors and essentially op- court, calling DataTreasury’s pat- lies the putative cost of assembling allpensiveof Skilledthe Christmas.” items variety. labor, from This like the the year,song nine “12 all ladies Days those offsetsrated:PNC Advisors’ “Thethe swans’ price news variablefor release French cost elabo- hens by usual after the deal was completed, thoseentThoughWhile holders people I.B.M.he say. becausewill isstep full down it ofgave M.B.A.’s,after banks the merger,trainedserve as inMr.a member the Liu, same 60, of will the kind continueboard. of team- to workIngenicoAmericanThe programs booth, a French business — that part manufacturer can of schools, thebe found Chinese right atof AcademyreferringdownF.D.I.C. in 2001 accusedto of the to Sciences backgroundmake the way firm — wasfor material of a negli- tornnew tlement would eventually reach unin- consult with Lenovo’s newly named erate like a private company. ents invalid and unenforceable. In all the items from the song “12 Days ofdancing,goods PNC Christmas.” and Advisors’ wouldservices This news make would year, release the have all biggest elabo- thoseset a rated:calculatingand geese “The saw a price coresignificant for index French increases, that hens ex- those people say. merger,broaderLenovoWhile —Mr. I.B.M.permission which Liu, is 60, is full stillwill to ofshred continue partly M.B.A.’s, paper gov- to serveworkMr. asprograms Yang, a member a serious-minded that of canthe board.be found execu- at AmericanAcademypaymentdown to the of business cardleaps Sciences of terminals; faith schools, — — wasthe back- right torn and downthatbuilding.gence patentin and 2001 But concealing examiners toit makewas soon waythe use rebuiltbank’s for to a deter- newtrueand sured depositors who lost money in chief executive, Stephen M. Ward Jr., Later, Mr. Liu won government papers filed in the United States Dis- of Christmas.” This year, all those goodsrated:dentbuyer in and back “Thea budget,services $66,334, price at wouldfor about$4,400, French havethe up cost4 set hensper- ofa andcludeswhich geese such may saw cost be significant dueanomalies. to fewer increases, hatch- While I.B.M. is full of M.B.A.’s, Lenovoservechecksernment as and— a member owned whichkeep electronic is — of still the has partlyboard. images only gov- two of AmericantiveMr. who Yang, helped businessa serious-minded fire upschools, the compa- execu- right downSVPCOward toin falling ,the 2001 the leaps employeeto check make of faith andway who — electronicfor theis caught aback- new building.minenowfinancial sits if an likeBut conditions. idea anit is wasempty new. soon artifact rebuilt along- and Superior’s collapse. the senior vice president and general approval to list the company’s stock trict Court for the Eastern District of goods and 3services7 15 would25 50 have75 85 set93 a 97buyerandcenta fully geese from back loaded saw last$66,334, sport significant year. utilityabout The vehicle.the 10increases, lords-a-cost of whichlingsTaking during may that be this into due breeding consideration, to fewer cycle hatch- cre- the Lenovo — which is still partly gov- ernmentthem.membersMr. Yang,The owned oflaw athe serious-minded took senior — effect has management in only late execu- twoOc- tivedownny’s who salesto the helped force,leaps fireof will faith up become the— the compa- chair-back- wardbuilding.clearingby a team falling But serviceof employeesupportive it was divisionsoon who co-workers. rebuilt is ofcaught and the nowsideButUnder sits the because like headquartersthe an agreement juriesempty are artifact of notannounced Lenovo’s sympa- along- Superior Bank claimed about $2.3 manager of I.B.M.’s Personal Sys-ID NAME:in Hong Kong Nxxx,2004-12-25,C,002,Bs-BW,E2 and for Lenovo to start buyer back $66,334, about the cost of awhichleaping fullyThat loaded may is went a recordbe sport due up utility price to 3 fewer percent, vehicle. for the hatch- 364 to lingsPNCating during index an imbalance rose this 3.1breeding percent, in the cycle roughly supply- cre- ernment owned — has only two memberstiveteam who with helpedof an the M.B.A. senior fire And up management thenone compa- of the ny’swardman. sales Ms. falling Ma, force, employee who will led become thewho talks is caught chair- to ac- bynowClearing Anda teamsits for like House ofthose supportivean empty Paymentswho need artifact co-workers. aCompany. jolt, along- each sidetheticparentFriday, the tocompany, Ernst big headquarters corporations, & Young Legend did of Holdings itnot Lenovo’s is admit easy. billion in assets at the time and was tems Group. tober.producing its own computers, rather lings$4,039.08,tokensThat during is of a affection and record this thebreeding price ranging 12 for drummerscycle the from cre- 364 a atingindemand line an with chain. imbalance the 3.7Turtledoves, percent in the increase supply- on the members of the senior management teamny’stop executives saleswith an force, M.B.A. have will ever And become noneworked chair-of thefor man.byquire a team Ms. I.B.M.’s Ma, of supportive who PC unit,led the is co-workers. expectedtalks to ac- to sidemorningAndTo thebe for sure, headquartersatthose 8:30 financial who the need Lenovoservices of a jolt, Lenovo’s theme eachcom- parentaforany fullyCritics a liability. company loadedcompany, now sport like worryLegend utilityDataTreasury that Holdings vehicle. Lenovo. to owned by the multibillionaire Pritzk- Many analysts were surprised by thanDataTreasury simply marketing is clearly hoping Western for tokensatingdrummingpartridge an of imbalance affection in rose a pear 3.6 ranging tree in percent, the to afrom supply- dozen to a demandinother the hand, first chain. 11 may months Turtledoves, have registered had a on more the by team with an M.B.A. And none of the topman.a multinational executives Ms. Ma, who have corporation. led ever the workedtalks to forac- quireremainAnd I.B.M.’s for as thosechief PC financialwho unit, need is expectedofficer. a jolt, each to morningparentpaniessong is company, routinely broadcast at 8:30 Legend the sue on Lenovo loudspeakersone Holdings another theme. comemustCriticsThatA spokesman find across is anow way record as worry to fora preserve Davidprice Ernst that for battling & I.B.M.’s Lenovo the Young, 364 a er family and a New York developer. abrands. bonanza. According to court docu- partridgedemand$2,224.30.drummers chain. in drumming. a pear Turtledoves, tree Still, to a the on dozen cost the otherthefruitful Consumer hand, breeding may Price havecycle, Index, had creating a which more an top executives have ever worked for aquire multinationalBut I.B.M.’s analysts PC corporation.also unit, say is thatexpected Lenovo to remainmorningALenovo’s payment as atchief challenge 8:30 financial theprocessing Lenovowill officer. be to theme meld songoverthroughoutCritics patentis broadcast now the infringement, headquarters, worry on loudspeakers that and Lenovo urging com- musttokensGoliath,traditionsCharles find of said Perkins, a affection inway Mr. a to PC Bednarek, saidpreserve ranging industry the firm theI.B.M.’s from of law- had in- a The Pritzkers agreed to a $460 mil- ments,By 1997, one ofwith the its two own law brand firms of origi- low- drummersotheris Among up only hand, the slightly,drumming. mayassorted have 1.6 fowlStill, percent, had named the a more overcost in fruitfulmeasuresoversupply breeding a of much birds cycle, broader and creatinga 31 range percent an of a multinational corporation. remainis Butno pushover.analysts as chief alsofinancialThe saycompany that officer. Lenovo is con- songradicallyLenovo’s is broadcast differentchallenge on corporatewill loudspeakers be to meld cul- throughoutmustpaniesworkers find like to a theI.B.M. guideway headquarters, to and the preserve corporateCitigroup I.B.M.’s urging hold ship traditionspartridgeyercreasingalready and made competitionformer in in a a changes pear PC patent industrytree andto its to examiner. commod- aauditing of dozen in- lion voluntary settlement in 2001 that nallycost hired Chinese-character-friendly to file the lawsuits is system is guarded with thelast song,year’s there total, were and compared various breed- with oversupplygoodsdecline and in price.”services. of birds and a 31 percent But analysts also say that Lenovo issidered noLenovo’s pushover. one challengeof China’s The company will most be success-to is meldcon- radicallythroughouttures. different the headquarters, corporate urging cul- workerstraditionsmultiplethrough perilous topatents in guide a PCwaters.and the industry corporatecollect huge of ship in-li- creasingdrummers“Banksitypractices, manufacturing. are competition drumming.inviting including targets, and addingStill, commod- becausethe morecost isfruitfulbarred up only breeding government slightly, cycle, 1.6 action percent, creating against over an workingcomputers, for a Lenovo contingency was fee suddenly of 40 the 1984 total, is 5.9 percent higher. declineThe in release price.” continued, “All told, isA no new pushover. work The company agenda: is con- sideredradicallyful corporations. one different of China’s For corporate most years, success- for cul- ex- tures.workers“Neither to guideculture the should corporate be the ship de throughcreasingcensing“Lenovo, perilous fees. competition Lenovo, The waters. difference Lenovo,” and commod- one is thatline ityistheytechnical But upmanufacturing. have only Mr. resources slightly, a Yang, lot of Lenovo’s 1.6 money and percent, increasing and current over they lastoversupplythe year’sowners. total,of The birds andowners and compared aadmitted 31 percent with no percent,China’s biggest with a computer cap that wasmaker. raised zeal and lawyers. thedeclinePNC 1984 intotal, Advisors, price.” is 5.9 a percent unit of higher. the PNC theThe cost release of the birds continued, in the Christmas “All told, sidered one of China’s most success- fultures.ample, corporations. Lenovo’s For brand years, has foroutsold ex- facto“Neither culture,” culture said shouldMartin be Gilliland, the de thosegoes,“Lenovo, companies “weMiranda Lenovo, are Mimi sailingrun Kuo Lenovo,” forpatent The through New licensing one York lineTimes the lastcanchiefitsBut requirements makeyear’s executive, Mr. settlements total, Yang, says and for Lenovo’s nottrainingcompared that to worry.are current and with-with ex- liability. So far, the Pritzkers have fromMr. $100 Liu, million a military to $225 academy million. grad- through perilous waters. ity manufacturing. fulstudying corporations. English For years, and for ex- ample,Dell, Hewlett-Packard Lenovo’s brand has and outsold I.B.M. factoan analyst culture,” at said Gartner Martin Research.Gilliland, goes,operationswaves “we to landsas are part sailing far of a away. business through Lenovo, and the chieftheinperience. "We their 1984 executive, are total, noise going is level says5.9 to percentstick thatnot to it worry. thehigher. would princi- be FinancialpaidCOMPANYPNCThe about release Advisors, Services $175 NAMES continued,million a Group, unit under of “Allthe the Pitts- PNC told, set- the cost of the birds in the Christmas uate“NeitherSo far, who two suffered culture companies should through have be China’s the paid de Liu“Lenovo, Chuanzhi, Lenovo, chairman Lenovo,” of one Lenovo line andBut one Mr.of its Yang, founders, Lenovo’s said that current ac- Chineseample, Lenovo’s brand Buyer has outsold Dell,computers of Hewlett-Packard PC in China. Unit and I.B.M. an“They analyst have toat start Gartner a new Research. one. Can wavessometimesLenovo, to Lenovo. lands waive far Wefees away. areif they building Lenovo, think it a Ernstimpossibleples"WePNC“Our of are Advisors,decision I.B.M. going for other& astoto a stickreach a unitgroups high-premium,Young to ofthese the to the princi-do,” settle- PNC he Financialtheburgh-basedtlement’s to cost ofPay Services the payment birds banking Group, in U.S. schedule,the Christmas the company, Pitts- Mr. factoDataTreasurybrutal culture,” Cultural said to Revolution, settle:Martin AffiliatedGilliland, said he goes,quiring “we the are international sailing through business the skillschief of executive, I.B.M. managers says not to was worry. one of Dell,handing Hewlett-Packard out birthday and I.B.M. computersAnd even in China. though it began as a “Theythey develop have to a startnew Lenovo a new one.business Can Lenovo,willnew buildsplendor.” Lenovo. a deeper We relationship are building with a plesFinancialsaid.high-valuements,” of DataTreasury I.B.M. Mr.Services image, Perkins as a“Group, he high-premium,is said, said. represented the “under- “We’re Pitts- burgh-basedstartedBarr said. tabulating banking the gift company, package anComputeroften analyst ran the Services at company Gartner, one with of Research. the an iron na- wavesTexas,the big Affiliatedto attractions lands far Computer of away. the deal accusedLenovo, for the personal"We are computer going to stick division. to the princi- computers in China. state-ownedAnd even enterprise,though it began Lenovo as has a theyculture? develop That’s a new one Lenovo of the business keys to newa customer,Lenovo splendor.” is alsopatent seeking experts the said. best Forout- high-valueburgh-basedbynot Nix,going Patterson to image, make banking “&any he Roach compromises said. company, of “We’re Dain- startedtwo decades tabulating ago to the see gift whether package the All 364 items in that “Theytion’sfist, scolding biggesthave to workers start information a who new showed one. technol- Can up Lenovo,DataTreasury Lenovo. of We deceiving are building the Pat- a ples of I.B.M. as a high-premium, cakes.And even though it began as a state-ownedtheyalways develop been enterprise, a entrepreneurial,new Lenovo Lenovo business ana- has culture?newsuccess.” splendor.” That’s one of the keys to high-valueaside companyLenovo advice is image, likealsoit can DataTreasury,seeking get, “ he hiring said.the best a “We’re clientthese out- notOverstartedgerfield,on this."going tabulating Tex.,to make Bank a plaintiff’s any the compromises gift law package Collapse firm twocosts decades of the presentsago in to see in’01 whether the English the All 364 items in that Is Moving to I.B.M.’sogylate suppliers;for meetings and andTown the pushing RDM Corpo- scien- ent and Trademark Office by with- always been entrepreneurial, ana- success.”In recent years, Lenovo officials sideexpertsroster advice said, that it the can includespoint get, hiringseems Goldman, ato client be to ontwobest this." decadesknown for ago the to $17 see billion whether award the costscarol of tracked the presents the United in the States English gov- song for $66,334, up state-owned enterprise, Lenovo has culture?ration,tists and a That’s small executives Canadianone of to the deliver company keys onto holdingLenovo background is also seeking materials the best thatout- not going to make any compromises All 364 items in that say the company’s corporate culture walkSachs; away McKinsey with as & much Company, money the as costsit wonHINSDALE, offor the the presents state Ill., of Dec. Texas in the24 in(AP) English tobac- — carolscoresernment’s tracked our commitment Consumer the United Price toStates work Index. gov- co- song for $66,334, up always been entrepreneurial, ana- lystssuccess.”thattheir sellssay. promises. hardwareIt was one andof the software first com- for sidewould advice have shownit can get,that hiringits ideas a client were on this." Continued From First Business Page panies here to list its shares in Hong has evolved from what some compa- possible.consulting firm; Weil, Gotshal & ThecarolcoBirds litigation. accounting tracked the andfirm United Ernst StatesDancing & Young gov- ernment’soperativelyThe general Ladies Consumer withconclusion regulators Price the firm and Index. has to 1.6% for the year. Lenovo’s decision to outsource its payment“All the processing. people were scientists in not new. song for $66,334, up Kong. It was among the first to re- ny officials called the “semimilitary” Manges,(DataTreasury the New Yorkdoes lawhave firm; at least and hasernment’sSeveral agreed success to Consumer pay $125 stories million Price may Index.to have the Theensuredrawn general is that that conclusion wethey have usually thethe do. strongestfirm has 1.6% for the year. management to New York. those“It wasdays,” a nuisanceMr. Liu recalled. lawsuit “They to us, DataTreasury, for its part, said in 2 I.B.M., which operates in more than wardTwo its employees Patents with stock Lead op- culture to that Numerous prevailed in the early oneOgilvy,Lawsuits processing the public relations client: Aimed Signaturefirm. FederalTheinspired at general Deposit copycats.Banks conclusion Insurance In banking,the Corpora-firm has the drawnpolicies1.6%This is year and thatfor PNCprocedures they the Advisors usually year. to do. foundserve thatour “I admire what Lenovo is doing,” andwere it verywas the casual. most They’d efficient always decision be court filings that the two patents 150 countries and had $9 billion in Twotions, which Patentshave turned some ofLead its days, toto a more Numerous easy-going and hip Bank,LawsuitsAnd the a Newnew language York subsidiary Aimed for the com- of tiondrawnmostSkew at over prominent is thatBanksthe theycollapse the example usually of a ‘12 ofdo. suburban a patent Days’clientstheThis prices yearand Index the wentPNC public upAdvisors in interest.” the found low single that said Joe Zhang, a UBS analyst who tolate settle for meetings it for a minimal and they’d amount,” make were the brainchild of its founder, an classic totaled $4,201, just 1.5 percent revenueTwo in 2003. Patents Leadtop executives to Numerous into millionaires. Dallashigh-techLawsuits Business culture. Journal, Aimed which Bankground,pany at Hapoalim is but English,Banks they of docompanyIsrael, assert said officials that that heit ChicagoholderThisThe DataTreasuryyear who bank PNC made three Advisors a business yearssuits found have ago, out thatcast the of thedigitsThe prices Ernst on went a & percentage Young up in theagreement low basis single forin- follows Lenovo. “Many Lenovo exec- saidtheirContinued Lesley promises. From Pool, So Firsta spokeswomanwe Businessdecided that Page for if inventor named Claudio Ballard. The used DataTreasury on a limited ba- classicmore thantotaled the $4,201, $4,138 just it would1.5 percent have Preparations are already under The company’s identity was DallasDataTreasuryThese Business days, has Lenovo’s linked Journal, new to its which corpo- Web ground,metsay. at least but they once do with assert people that from he F.D.I.C.thesecuringanThe unusually prices DataTreasury announced licensing went wide up net. Friday. fees in suits theZions is lowRonaldhave Bancor- single cast A. digitsvolvedgoodsbased and on two price remained a settlements: percentage differentials. steady one basis for for Swans, serv- $40for utives have decided to do this at the ContinuedAffiliatedanyone was From Computer. late First they’d Business She stand would upPage notfor filings are silent on Mr. Ballard’s sis to store check images and let cli- morecost a thanyear ago.” the $4,138 it would have way in Beijing. For the last few shaped,Dallas Business in part, by Journal, its visionary which DataTreasuryground,site,rate said headquarters but it was they has $50,000. do linked in assert Beijing’s to its that Web“Sili- he metJ.The P.Lenovo atMorgan DataTreasury least officials onceChase with and suits say peoplethat have they they from cast areap- andigitsKatz,poration,The unusually who By on failure ELIZABETHfor is a expected wideexample, percentage of net. Superior to Zionswhose OLSON have basis Bancor- earnedNetDe- Bank, for goodsmillionclassicices.doves, and totaledwith partridges remained the $4,201, F.D.I.C. and steady just callingand 1.5 for another percent serv- birds Continuedexpense of From their First careers. Business They’re Page sayone theminute.” amount, but an article in The professional credentials and back- entspropriated retrieve his them.) ideas. costMr. a year Kleintop ago.” said the trumpeter months, all vice presidents have chairman,DataTreasurya patent on Mr.an hasaspect Liu, linked of who the to process, in its Web1984 site,metconAs said Suburb”atfor least itRDM, was once is $50,000. DataTreasury teaming with people with issued young from J.anstudying P. unusually Morgan American Chasewide net. andbusiness Zions that theyBancor- history, ap- poration,basedgoods$2posit billion and in subsidiary for Hinsdale,in remained feesexample, by cost2009, sellssteady whose thewhen electronic for F.D.I.C.NetDe- someserv- ices.formore(today’sThe $85 than flat million canaries) the prices $4,138 involving for cost it services, would about enforce- have ac-the putting personal ego behind for the abut patentAlong “even on the thatan aspect way, arcane of Mr. featurethe Liuprocess, may also a news release saying that the Cana- propriatedThe list ofhis DataTreasury’s ideas. defend- positofcheck his 52processing subsidiary patents expire.technology, sells Among electronic has thein- cost a year ago.” swansMr. Kleintopcould now said and thethen trumpeter really jolt been required to study English for at helpedsite, said found it was Lenovo $50,000. with a group of J.20-As P. Morganfor and RDM, 30-somethings, Chase DataTreasury and that they casually issued ap- poration,and the chieffor example,executive whose lists The NetDe- Har- aboutices.WASHINGTON, $700 million, Dec. making 24 — it Maids- one of mentcordingsameThe claimsas flat tolast theprices year, by group’s the according for Treasury’s services, chief to invest- infor- ac-Of- greater good of the company.” butbegroomed something “even a that cadre that arcane ofhas loyal been feature and done fierce may be- propriateddian company his ideas. would pay a fee for antsThe appears list of DataTreasury’s somewhat random, defend- giv- checkcompaniestervened processing onthat behalf have technology, paid of him Electronic has royal- in- Mr. Kleintop said the trumpeter swansthe index, could because now and breeding then really cycles jolt leasta patent one on hour an aspect a day. of The the chairman process, scientistsAs for RDM, from theDataTreasury Chinese Academy issued adressed, news release chattering saying that into the mobileCana- positvard Business subsidiary Review sells as part electronic of his thea-milking,The largest flat gold prices federally rings for and insured services, turtledoves finan- ac- cordingficementmation ofstrategist, fromto Thrift the the group’sJeff Supervision, Cincinnati Kleintop, chief Zoo invest-reflect which and People involved in the negotiations before,”executives, something he said. including that“Patent has officersbeen Yang done Yuanq- aren’t be- each check imaging terminal it de- antschecken that appears processing all majorsomewhat technology, banks random, engage has giv- in- in tervenedtiesData are Systems, Bank on of behalf saying America, ofthat ElectronicMicrosoft, it and not thevary index, and affect because the price. breeding In 1984, cycles for saysbut “even he has that read arcane books feature about may Bill ofa newsSciences. release saying that the Cana- dianphonesThe company list and of looking DataTreasury’s would confident. pay a defend- fee for regular reading. cialcordingwere institutions a relative to the group’stobargain fail in this chiefa decade. year, invest- but mentclosedswansanBotanical hourly strategist, Superiorcould compensationGardens. now Jeffon and July Kleintop, then 27,anchored really2001. reflect Thejolt by with I.B.M. said that Lenovo officials fore,”necessarilying, 42, he said. who experts. “Patent is now Almost theofficers company’s certain- aren’t antsploys appears and “a somewhat per-click random, royalty giv- for entervenedcheck that imaging all on major behalf and banks archiving, of Electronicengage and in DataHewlett-PackardDataTreasury Systems, sayingdeveloped and Wellsthat the it Fargo. andsystem not varyinstance, and affect the seven the price. swans-a-swim- In 1984, for Gatesbe something and Andrew that has Grove. been done And thebe- dianEarly company on, it was would the hard-charging pay a fee for eachThe check halls imagingare decked terminal with employ- it de- In fact, like other computer and mentanyoneInvestigators strategist, who shopped for Jeff the Kleintop, Treasury for Frenchreflect De- anF.D.I.C.thea static Buthourly index, theminimum said compensation because price that wage itof breeding would French anchored and receivethe cycles hens, out- by saw no other choice. They recognized necessarilyDisneyly,chief if they executive, wereexperts. aware andOverhauls Almost Mary of this, certain- Ma, they 52, enstorage that Its of all electronic majorPolicy banks documents engage on and in CompensationcheckDatathat myriad Systems, imaging companies saying and archiving, that handle it and credit andnot DataTreasurythatOther E.D.S. patent uses. developed holders are the just system start- instance,ming called the for seven in the song swans-a-swim- cost $1,000 chieffore,” executive he said. “Patent of Lenovo officers has agreed aren’t Mr.each Liu check who imaging persuaded terminal the Chinese it de- ploysee recognition and “a per-click plaques, royalty business for software giants, Lenovo is even fan- partment,anhens, hourly geese compensationthe and F.D.I.C. ladies and dancinganchored Congress may by abothvarysourcingwhich static amounts.and are minimum ofaffect a unskilled slightly the wage price. more labor. and In exotic 1984,the out-ver- for that Lenovo could not simply take ly,wouldn’tLenovo’s if they allow highly were someone aware respected ofto this,get chief a theypat- fi- check imaging and archiving, and thatDataTreasurycard myriad transactions. companies developed Among handle the them system credit are thating“The toE.D.S. take idea uses. to of the electronic courts. LMLcheck Pay-pro- mingeach, called but infor subsequent in the song cost years $1,000 the tonecessarily give up day-to-day experts. Almostmanagement certain- of governmentploys and “a to per-click give the royalty company for storagecheckschool theorems of information, electronic and Newdocuments calculated Age philos- and at ning its own myths. In 1984, the com- blamedahave static been theminimum risky in for business awage touch and strategies of the sticker out- sourcinginstance,sion“WeHence, of still American of the unskilledexpect eight seven to hens,maids-a-milking, labor. lose swans-a-swim- went money up be- 200 over a much bigger I.B.M. PC unit wouldn’tentnancialBURBANK, on it.” officer. allow Calif.,someone Dec. to 24 get (AP) a pat- — thatpected myriad to name companies a successor handle by June.credit cardthatcompensationViewpointe E.D.S. transactions. uses. Archive committee, Among Services said. them, a com- are ofmentscessing “The Superior’s Systems,idea is quiteof managementelectronic a old, small and check there’s for pro- pro- the a price of the long-necked birds thely, if company they were to awareassume of the this, role they of greaterstorage of control electronic over documents its hiring and checkaroundophy: “Happiness,” information,a 50 percent royaltyreads calculated one rate.” work- at pany was formed in a small, con- sourcingshock. of unskilled labor. causemingwhopercent,Hence, earnedcalled of this theMr. for failure, $26.80 eight Kleintop in the maids-a-milking, forbut song thesaid,this cost chorewill largely $1,000 go 20a each, but in subsequent years the wouldn’tand run it allow from someone Beijing. to get a pat- entTheABut on Walt newit.” just Disney howcheck the Company processing new company’s has law, re- aroundcardplaceThe transactions. poster.newa 50 percent long-term “Work Amongroyalty hardincentive rate.” them and pro- arelive Viewpointepanycrete“TheFor setsecurity stock-optionidea up Archive of by guard’selectronic some Services grants booth major check made, thata bankscom- pro- be- in cessingcollapse,cessorgreat deal in is butVancouver, quite ofthey prior old,also British artand cited associated there’s failuresColum- a long way in recouping as much as priceslumped. of Since the 2001,long-necked the price birds has chairman. salarycheck decisions, information, allowing calculated the state- at Before Affiliated Computer set- Hence,So said the PNC eight Advisors, maids-a-milking, the wealth whoeach,yearsbecause earned ago,but put inAmerican $26.80 subsequenta buyer for out thebreeders only years chore $41.20 the 20 of entThat on it.” is why a major theme of the vampedknownmanagementA new as its Check check executive will 21, take processingraised compensationshape the inhopes law,Bei- Viewpointegramart,” reads provides another.Archive that Services half of , thea com- re- panycessing2005andcame I.B.M. and set its is after, up firstto quite bystore laboratory Disney’s some old, and and majorretrieve top and there’s five bankshead- digi- ex- a greatonbia,with the announced the dealpart patent,” of Superior’s priorin late said artOctober John outside associated J. that Feld- au- it possible,” an F.D.I.C. spokesman, slumped.risen, to $500 Since each. 2001, Every the year, price PNC has His task will be to fly back and ownedaround company a 50 percent to raise royalty capital rate.” from tled,Before it did Affiliated answer Computer the lawsuit set- in whomanagement earned $26.80 firm that for each the chore year tal- 20 yearspricetoday,French ago, at ofhens $5.15 put the introducedaan buyer long-neckedhour. out aonly more $41.20 birds ex- talks was how to keep business as knownpolicy,ofjing DataTreasury and as requiring New Check York 21, topand israised still officersother unclear. the such tohopes ownpat- panystrictedNewcomers set stock up bygranted to some Lenovo to major senior are banks exec- even andgreatecutivestalquarters. images I.B.M. deal will to of of store checks be prior requiredand for art retrieve large associated to banks; digi- keep withditinghadhaus, secured the a firm, lawyerpatent,” a Ernst 2006 representing said trial& John Young. date J. Zions,Feld- for The a David Barr. He said some of the set- offsets the swans’ variable cost by forthA newfrom Beijingcheck processing to New York law, to outsideBefore investors Affiliated and Computeressentially set-op- tled,court, it calling did answer DataTreasury’s the lawsuit pat- in yearslies the ago, putative put a buyer cost out of assemblingonly $41.20 today,slumped.pensiveSkilled at variety.$5.15 labor,Since an 2001, hour.like the the nine price ladies has risen, to $500 each. Every year, PNC usual after the deal was completed, ofandent DataTreasuryThough hold holders more he becausewill stock and step andother itdown gavetying such after banksstock pat- the andutivestrained I.B.M. will in tovest the store sameonly and if kind theretrieve apprecia- of team- digi- talwithsharesIngenico Theimages the boothrepresenting , patent,”a of French checks — part said manufacturer for at ofJohn large least the J. Chinesebanks; 75 Feld- per- of haus,F.D.I.C.patentreferring a infringement lawyeraccused to the background representing the lawsuit firm ofmaterial against Zions, negli- tlement would eventually reach unin- consultknown as with Check Lenovo’s 21, raised newly the named hopes eratetled, like it did a private answer company. the lawsuit in court,ents invalid calling and DataTreasury’s unenforceable. pat- In today,all the at items $5.15 from an hour. the song “12 Days risen,dancing,SkilledPNC to Advisors’ $500 labor, would each. like makenews Every the release the nine year, biggest ladieselabo- PNC offsetscalculating the swans’ a core variable index that cost ex-by those people say. entawardsbroadermerger, holders toMr. permission the becauseLiu, performance 60, towill it shredgave continue ofbanks paper the to taltionwork images of programs the company’s of checks that for canshares, large be found plusbanks; re- at Ingenicohaus,centpaymentAcademy of a ,thelawyer a ofFrench card after-tax Sciences representing terminals;manufacturer gain — was realized Zions, torn and of referringgencefourthat patentcompanies, and to concealing the examiners background including the use bank’s thematerial to deter- Tele-true sured depositors who lost money in chiefof DataTreasury executive, Stephen and other M. Wardsuch pat- Jr., court,Later, calling Mr. Liu DataTreasury’s won government pat- entspapers invalid filed in and the unenforceable.United States Dis- In ofSkilled Christmas.” labor, Thislike the year, nine all ladies those dancing,offsetsdentrated: in the “Thea wouldbudget, swans’ price make at variable for$4,400, French the up costbiggest 4 hensper- by calculatingcludes such cost a core anomalies. index that ex- While I.B.M. is full of M.B.A.’s, broadercompany’schecksserve as and permissiona member sharekeep electronic price. of to the shred board. images paper of IngenicoinvestedAmerican , dividends,a French business manufacturer exceeds schools, that right of paymentreferringfromSVPCOdown thein, 2001 to theexercise cardthe to check background make terminals;of andthe way options electronic formaterial a and new for thatfinancialCheckmine patent if division an conditions. idea examiners isof new.First useData to and deter- the Superior’s collapse. theent senior holders vice because president it gaveand general banks approvalents invalid to list and the unenforceable. company’s stock In paperstrict Court filed for in the EasternUnited States District Dis- of dancing,goods and would services make would the have biggest set a dentcalculatingcentand geesein from a budget, saw last a core year.significant at $4,400, index The 10 increases,up that lords-a- 4 per- ex- cludesTaking such that cost into anomalies. consideration, the Lenovo — which is still partly gov- checksthem.TheMr. newThe Yang,and policylawkeep a serious-mindedtook electronic is ineffect addition inimages late toexecu- oth-Oc- of paymentthedown Standard to the cardleaps & Poor’s of terminals; faith 500-stock — the back-and in- SVPCOthatatclearingbuilding. least patent, one theBut service examiners year. checkit was Disney’s division soon and use rebuilt electronic tochief of deter- andex- the mineNovaUnderBut if Informationbecause an theidea agreement isjuries new. Systems are not announced divisionsympa- Superior Bank claimed about $2.3 managerbroader permission of I.B.M.’s to Personal shred paper Sys- inpapers Hong filed Kong in and the forUnited Lenovo States to start Dis- trict Court for the Eastern District of dentbuyer in back a budget, $66,334, at about$4,400, the up cost4 per- of centcludesleapingwhich from such may went last cost be year. anomalies. due up toThe 3 fewer percent, 10 lords-a- hatch- to PNCTaking index that rose into 3.1 consideration, percent, roughly the ernment owned — has only two ertive compensation who helped firechanges up the the compa- board SVPCOdexward over falling, theeither employee check the previous and who electronic is year caught or clearingmineecutiveClearingnow sits if an likewillHouse serviceidea an be is Paymentsempty new. required division artifact Company. to of along- keep the Friday,ofthetic ButU.S. because toBancorp Ernst big corporations,& juries. Young are did not not it sympa- is admit easy billion in assets at the time and was temschecks Group. and keep electronic images of them.producingtricttober. Court The itslawfor own thetook Easterncomputers, effect inDistrict late rather Oc- of cent from last year. The 10 lords-a- leaping$4,039.08,Taking wentthat and into up the consideration, 3 12 percent, drummers the to PNCin line index with rose the 3.1 3.7 percent, percent increase roughly members of the senior management madeny’s sales in September force, will to become Disney’s chair- bo- clearingthree-year service time period. division of the ClearingsharesTo be representing sure,House financial Payments 100 services percentCompany. com- of theticanyfora fullyThe aliability. company tonumber loaded big corporations, sport oflike patent utilityDataTreasury lawsuits vehicle. it is easy re- to lings during this breeding cycle cre- them. The law took effect in late Oc- tober.thanDataTreasury simply marketing is clearly hoping Western for by a team of supportive co-workers. sideBut thebecause headquarters juries are ofnot Lenovo’s sympa- leaping went up 3 percent, to $4,039.08,ownedPNCdrumming index by the androse rosemultibillionaire the3.1 3.6percent, 12 percent, drummers roughlyPritzk- to inin line the firstwith 11the months 3.7 percent registered increase by teamMany with analysts an M.B.A. were And surprised none of the by nusman. plan, Ms. Ma, tying who executive led the talks bonuses to ac- ClearingThe new House policy Payments also requires Company. the theticthepaniesTo gain be to sure, routinelyfor big 12 corporations,financial months. sue services one it another is com- easy forlatedcomeThat a company to across is payment a record as like a processing DataTreasury David price for battling the is ex-364to a ating an imbalance in the supply- tober. brands.a DataTreasurybonanza. According is clearly to court hoping docu- for And for those who need a jolt, each parent company, Legend Holdings. $4,039.08,A spokesman and forthe Ernst 12 drummers & Young, drummingerin$2,224.30. family line with and the rose a New 3.7 3.6 percentYork percent, developer. increase to inthe the Consumer first 11 months Price registered Index, which by top executives have ever worked for morequire closelyI.B.M.’s to PC the unit, company’s is expected finan- to topATo fivepayment be executivessure, financial toprocessing hold, services over time,com- paniesforoverA a shareholder company patent routinely infringement, like lawsuit sue DataTreasury one challenging and another com- to comeCharlespectedGoliath,tokens across to of Perkins,said grow affection Mr. as rather aBednarek,said David ranging the than battling firm the fromshrink, law- had a a demand chain. Turtledoves, on the DataTreasury is clearly hoping for aments, bonanza.By 1997, one with Accordingof the its two own law to brand courtfirms of docu-origi- low- morning at 8:30 the Lenovo theme Critics now worry that Lenovo drumming rose 3.6 percent, to $2,224.30.in TheAmong the Pritzkers first the 11 assorted months agreed fowl registeredto a named$460 mil- byin themeasures Consumer a much Price broader Index, range which of a multinational corporation. cialremain performance. as chief financial The plan officer. also re- Apaniescompany payment routinely stock equal processing sue to onethree another to five overpreviouspanies patent like compensation I.B.M. infringement, and Citigroup policies and com- ishold on Goliath,andyerpartridge industryand said former in Mr. a executives pear Bednarek, patent tree to sayexaminer. the a dozentherelaw- other hand, may have had a more a bonanza. According to court docu- ments,nally hiredone of tothe filetwo law the firms lawsuits origi- is song is broadcast on loudspeakers comemust find across a way as to a Davidpreserve battling I.B.M.’s a already made changes to its auditing lionthe voluntary song, there settlement were various in 2001 breed- that measuresgoods and aservices. much broader range of costAduces payment the Chinese-character-friendlyamount ofprocessing options granted overtimessystem patent their is infringement,base guarded salary, depending and with com- paniesmultiple like patents I.B.M. andand collectCitigroup huge hold li- yer$2,224.30.“Banksdrummers and are former drumming.inviting patent targets, Still, examiner. becausethe cost thefruitfulAmong Consumer breeding the assorted Price cycle, fowl Index, creating named which in an ments,But analystsone of the also two saylaw thatfirms Lenovo origi- nallyworkingLenovo’s hired for challenge to a contingency file the will lawsuits be fee to ofmeld is40 throughout the headquarters, urging Goliath,trial.traditions Those said in policies Mr. a PCBednarek, resultedindustry the in of law- the in- practices,will be a collective including toll. adding As more more pat- barred government action against computers, Lenovo was suddenly system is guarded with multiplecensing fees.patents The and difference collect huge is that li- theyis Among up have only the slightly,a assorted lot of money1.6 fowl percent, named and theyover in themeasuresoversupply song, there a of much birds were broader and various a 31 range percent breed- of goods and services. Ais nonew pushover. work The agenda:company is con- workingtopercent,radically executives, forwith different a a contingency shifting cap that corporate the was fee majority raised of cul- 40 paniesonworkers the position. like to I.B.M. guide and the corporateCitigroup hold ship yerformercreasing and Disney formercompetition president, patent and Michael examiner. commod- S. “Bankstechnicalent holders are resources inviting step forward targets, and increasing tobecause exact the owners. The owners admitted no nally hired to file the lawsuits is China’ssystem biggest is guarded computer maker. with zeal and lawyers. censingthose companies fees. The run difference patent licensing is that the song, there were various breed- goodsdecline and in services.price.” sidered one of China’s most success- oftures. grants to restricted stock. multiplethroughThe new perilouspatents pay planwaters.and collect “will helphuge the li- “BanksOvitz,ity manufacturing. beingMirandaare inviting Mimi granted Kuo targets,for The a New severance becauseYork Times theyitsfees,canlast requirements make year’s have“it’s likesettlements atotal, lot a death offorand money training compared bythat a andthousandare and with- theywith ex- liability. So far, the Pritzkers have working for a contingency fee of 40 percent,fromMr. $100 Liu, with milliona military a cap to $225 that academy million. was raised grad- zeal and lawyers. studyingful corporations. English For years, and for ex- The“Neither changes culture come should as Disney be the plans de censingcompany“Lenovo, fees. continue Lenovo, The differenceto Lenovo,” attract oneand is that linere- thosetheypackageoperationsBut havecompanies Mr. of aas Yang, cash lot part run of and Lenovo’sof money patent a stockbusiness licensing and currentoptions theyand canperience.cuts,”inthe their 1984make said total, noise settlements Octavio is level 5.9 percent that Marenzi,that it arehigher. would with- who be paidCOMPANYThe about release $175 NAMESmillion continued, under “All the told,set- percent, with a cap that was raised fromuateSo $100 who far, million two suffered companies to $225 through million. have China’s paid Liu Chuanzhi, chairman of Lenovo and one of its founders, said that ac- ample, Lenovo’s brand has outsold zealtofacto replace culture,” and its longtimelawyers.said Martin chief Gilliland, execu- thosetaingoes, the companies “we best are employees sailingrun patent throughwhile licensing align- the operationscanvaluedsometimeschief make executive, at $140 settlementsas waive partmillion says fees of not ain if thatbusiness 1995theyto worry.are afterthink with- and 14 it inleadsimpossible “Our theirPNC a decision Advisors,noise technology for levelother to reach a thatgroups unitconsulting these it of wouldto the do,”settle- firmPNC behe tlement’stheCOMPANY cost of the payment NAMESbirds in schedule, the Christmas Mr. from $100 million to $225 million. brutalDataTreasurySo far, Cultural two companies to Revolution, settle: haveAffiliated said paid he quiring the international business skillswill of build I.B.M. a deeper managers relationship was one with of handingDell, Hewlett-Packard out birthday and I.B.M. tive,an analyst Michael D. at Eisner, Gartner who Research. has said operationsingTexas,waves their Affiliated to interests landsas part farComputer of with a away. business those accused Lenovo, of and our sometimesinmonths "We their are of noise employment. goingwaive level to fees stick that if theyto it the would think princi- beit impossiblements,”thatsaid.FinancialCOMPANY caters DataTreasury Mr. Services forto banks. Perkins otherNAMES Group,groups “Financial is said, represented tothe “under- do,” Pitts-insti- he Barr said. So far, two companies have paid DataTreasuryoftenComputer ran the Services company to settle:, one with ofAffiliated an the iron na- the big attractions of the deal for the personalwilla customer, build computer a deeper patent relationshipdivision.experts said. with For computers in China. he“They will have retire to when start his a new contract one. Can ex- Texas,sometimesshareholders,”DataTreasuryLenovo, Affiliated Lenovo. waive of Judith Computerfees Wedeceiving areif they L. building accusedthe think Estrin, Pat- it a impossibleplesThat of trial I.B.M. for is other scheduled as agroups high-premium, to to resume do,” he said.tutionsbyburgh-based Nix, DataTreasury are Patterson just banking going & isRoach representedto company, get of Dain- sued DataTreasury to settle: Affiliated Computerfist,tion’s scolding biggest Services workers information, onewho ofshowed technol-the na- up a company like DataTreasury, these cakes.And even though it began as a piresthey developin 2006. Thea new company Lenovo said business it ex- willchairwomannew build splendor.” a deeper of the board’srelationship executive with asaid.nexthigh-value customer, month DataTreasury inimage,patent Delaware. experts “ he is said.represented said. “We’re For bymoregerfield,started Nix, and Patterson tabulating Tex.,more.” a plaintiff’s & the Roach gift law of package Dain- firm Computer Services, one of the na- tion’slateTexas,ogy for suppliers; biggest Affiliatedmeetings information and Computerand the pushing RDM technol-accused Corpo-scien- DataTreasuryent and Trademark of deceiving Office the by with- Pat- experts said, the point seems to be to state-owned enterprise, Lenovo has culture? That’s one of the keys to a customer,InLenovo recent is patentalso years, seeking experts Lenovo the said. officialsbest Forout- arosterbynot company Nix, going Patterson that to like make DataTreasury, includes &any Roach compromises Goldman, of these Dain- gerfield,besttwo decadesknown Tex., for ago a the plaintiff’s to $17 see billion whether law award firm the tion’s biggest information technol- ogytistsDataTreasuryration, suppliers; and a small executives ofand Canadian deceiving the to RDM deliver company theCorpo- Pat- on entholding and Trademark background Office materials by with- that walk away with as much money as All 364 items in that always been entrepreneurial, ana- success.” sayaside company the advice company’s likeit can DataTreasury, get,corporate hiring culturea theseclient expertsSachs;gerfield,on this." said, McKinsey Tex., the a point plaintiff’s & Company,seems law to be firm the to bestitcosts won known offor the the for presents state the $17of Texas inbillion the in Englishaward tobac- ogy suppliers; and the RDM Corpo- ration,theirentthat and sellspromises. a Trademark smallhardware Canadian and Office software company by with- for holdingwould have background shown that materials its ideas were that hasexperts evolved said, from the point what seems some compa-to be to walkconsultingbestpossible. known away withfirm;for the as Weil, $17 much billion Gotshal money award as & itBirdscocarol won litigation. trackedfor the state theand Unitedof Texas StatesDancing in tobac- gov- Ladies Lenovo’sration, a smalldecision Canadian to outsource company its thatholdingpayment sells background processing.hardware and materials software that for wouldnot new. have shown that its ideas were song for $66,334, up “All the people were scientists in nywalk officials away called with asthe much “semimilitary” money as possible.Manges,it won(DataTreasury for the the New state York does of Texas law have firm; in at tobac- least and coernment’s Severallitigation. success Consumer stories Price may Index. have management to New York. paymentwould“It washave processing. ashown nuisance that lawsuitits ideas towere us, notDataTreasury, new. for its part, said in that sells hardware and software for those days,” Mr. Liu recalled. “They culturepossible. that prevailed in the early Ogilvy,coone(DataTreasury litigation. processing the public relationsdoes client: have firm. Signature at least inspiredTheSeveral general copycats. success conclusion stories In banking,the may firm have has the 1.6% for the year. “I admire what Lenovo is doing,” notand“It new. it waswas athe nuisance most efficient lawsuit decision to us, courtDataTreasury, filings that for the its part, two patentssaid in payment processing. were very casual. They’d always be days,(DataTreasury to a more easy-going does have andat least hip oneBank,AndSeveral processing the a Newnew success language York client: stories subsidiary for maySignature the com- have of inspiredSkewmostdrawn prominent is copycats.that they the example usually In banking,‘12 ofdo. a patent theDays’ Index said Joe Zhang, a UBS analyst who andto DataTreasury, settle it was it the for most a for minimal efficient its part, amount,”decision said in courtwere the filings brainchild that theof its two founder, patents an Two“It was a nuisancePatents lawsuit to Lead us, late for to meetings Numerous and they’d make high-techoneLawsuits processing culture. client: Aimed Signature Bank,panyinspiredBank at isHapoalim a English, copycats.Banks New Yorkof company Israel, In subsidiary banking, said officials that the of it mostholderThis prominent year who PNC made example Advisors a business of found a patent out that of follows Lenovo. “Many Lenovo exec- tocourtsaid settle Lesley filings it for Pool, that a a minimal spokeswoman the two amount,” patents for wereinventor the brainchildnamed Claudio of its Ballard. founder, The an used DataTreasury on a limited ba- and it was the most efficient decision their promises. So we decided that if Bank,These a days, New Lenovo’s York subsidiary new corpo- of Banksay.most prominentHapoalim ofexample Israel, saidof a patentthat it holdersecuringthe prices who licensing went made up a fees in business the is Ronaldlow out single of A. based price differentials. Swans, utives have decided to do this at the saidwereAffiliated Lesley the brainchild Computer. Pool, a spokeswoman of Sheits founder, would for notan inventorfilings are named silent Claudio on Mr. Ballard. Ballard’s The sis to store check images and let cli- to settle it for a minimal amount,” anyoneDallas was Business late they’d Journal, stand up which for rateBankground, headquarters Hapoalim but they of Israel, do in Beijing’s assert said that that “Sili- heit usedholderLenovoThe DataTreasury DataTreasury who officials made a on businesssaysuits a limited theyhave out cast areba- of securingKatz,digits Bywho on ELIZABETH licensing is a expected percentage fees to OLSON ishave Ronald basis earned forA. doves,classic partridgestotaled $4,201, and just calling 1.5 percent birds expenseContinued of From their First careers. Business They’re Page Affiliatedonesay minute.”the amount, Computer. but an She article would in The not filingsprofessional are silent credentials on Mr. and Ballard’s back- sisents to retrieve store check them.) images and let cli- said Lesley Pool, a spokeswoman for inventorDataTreasury named has Claudio linked Ballard. to its WebThe conusedmet Suburb” atDataTreasury least is once teaming with on a people with limited young from ba- studyingsecuringan unusually American licensing wide net. feesbusiness Zions is Ronald history,Bancor- A. Katz,$2goods billion who and inis remained expectedfees by 2009, steadyto have when for earned someserv- (today’smore than canaries) the $4,138 cost it would about have the puttingAffiliated personal Computer. ego behindShe would for thenot sayfilingssite,Along the said areamount, it the was silent way, $50,000.but on an Mr. Mr.article Liu Ballard’s in alsoThe professionalsisJ. P.to Morganstore check credentialsChase images and that and they let back- cli-ap- entsporation, retrievefor them.)example, whose NetDe- $2of billion his 52 in patents fees by expire. 2009, when Among some the cost a year ago.” 20- and 30-somethings, casually andKatz, the who chief is expected executive to lists have The earned Har- ices.WASHINGTON, Dec. 24 — Maids- same as last year, according to infor- greatersaya patent the amount,good on an of theaspect but company.” an of article the process, in The groomedprofessional a cadre credentials of loyal and fierce back- entspropriated retrieve his them.) ideas. posit subsidiary sells electronic ofcompanies his 52 patents that have expire. paid Among him royal- the Mr. Kleintop said the trumpeter As for RDM, DataTreasury issued dressed, chattering into mobile vard$2 billion Business in fees Review by 2009, as whenpart ofsome his a-milking,The flat gold prices rings for and services, turtledoves ac- mation from the Cincinnati Zoo and butPeople “even involved that arcane in the featurenegotiations may executives, including Yang Yuanq- The list of DataTreasury’s defend- check processing technology, has in- companiesties are Bank that of have America, paid him Microsoft, royal- swans could now and then really jolt a news release saying that the Cana- phones and looking confident. regularof his 52 reading. patents expire. Among the werecording a relative to the bargain group’s this chief year, invest- but Botanical Gardens. withbe something I.B.M. said that that has Lenovo been officialsdone be- ing, 42, who is now the company’s ants appears somewhat random, giv- tervened on behalf of Electronic tiesHewlett-Packard are Bank of America, and Wells Microsoft, Fargo. the index, because breeding cycles dian company would pay a fee for The halls are decked with employ- companiesIn fact, likethat otherhave paid computer him royal- and anyonement strategist, who shopped Jeff Kleintop, for French reflect But the price of French hens, sawfore,” no he other said. choice. “Patent They officers recognized aren’t chiefDisney executive, andOverhauls Mary Ma, 52, en that Its all majorPolicy banks engage on in CompensationtiesData are Systems, Bank of saying America, that Microsoft, it and not Hewlett-PackardOther patent holders and Wells are justFargo. start- vary and affect the price. In 1984, for each check imaging terminal it de- ee recognition plaques, business software giants, Lenovo is even fan- hens,an hourly geese compensation and ladies dancing anchored may by which are a slightly more exotic ver- thatnecessarily Lenovo experts. could not Almost simply certain- take DisneyLenovo’sploys and highly “a per-click respectedOverhauls royalty chief for fi- schoolcheck Its theorems imaging Policy and and New archiving, Age philos-on and CompensationningHewlett-PackardDataTreasury its own myths. developed and In Wells 1984, the Fargo.the system com- inga Otherstatic to take patentminimum to theholders courts.wage are and LMLjust the start- Pay- out- instance, the seven swans-a-swim- over a much bigger I.B.M. PC unit BURBANK, Calif., Dec. 24 (AP) — pected to name a successor by June. compensation committee, said. have been in for a touch of sticker sion of American hens, went up 200 Disneyly, if they were awareOverhauls of this, they nancialstorage Its officer. of electronic Policy documents on and Compensationophy:that myriad “Happiness,” companies reads handle one work-credit panythatOther E.D.S. was patent formeduses. holders in aare small, just start- con- ingmentssourcing to take Systems, of tounskilled the a courts. small labor. LMLcheck Pay- pro- ming called for in the song cost $1,000 and run it from Beijing. TheBURBANK, Walt Disney Calif., Company Dec. 24 (AP) has re-— pectedThe to new name long-term a successor incentive by June. pro- compensationFor stock-option committee, grants said. made in shock. percent, Mr. Kleintop said, largely wouldn’t allow someone to get a pat- checkBut just information, how the new calculated company’s at placecard transactions. poster. “Work Among hard them and live are creteing“The to security take idea to of guard’s the electronic courts. booth LMLcheck that Pay- pro-be- mentscessorHence, Systems,in Vancouver, the eight a small maids-a-milking, British check Colum- pro- each, but in subsequent years the That is why a major theme of the Thepectedvamped Walt to its name Disney executive a successor Company compensation by has June. re- compensationgramThe newprovides long-term committee, that half incentive said. of the pro- re- 2005For and stock-option after, Disney’s grants top made five ex- in So said PNC Advisors, the wealth because American breeders of entBURBANK, on it.” Calif., Dec. 24 (AP) — managementaround a 50 percent will take royalty shape rate.” in Bei- art,”Viewpointe reads another. Archive Services, a com- camementscessing its Systems, is first quite laboratory a old, small and check and there’s head- pro- a cessorbia,who announced earned in Vancouver, $26.80 in late for British October the choreColum- that 20it price of the long-necked birds talksThe was how to Company keep business has re- as vampedpolicy,The new requiring its long-term executive top officers compensationincentive to pro-own gramstrictedFor provides stock-option stock granted that grants half to senior of made the exec- re- in 2005ecutives and after, will beDisney’s required top tofive keep ex- management firm that each year tal- French hens introduced a more ex- A Walt new Disney check processing law, jingBefore and New Affiliated York is still Computer unclear. set- panyNewcomers set up by to some Lenovo major are banks even quarters.cessorgreat dealin Vancouver, of prior British art associated Colum- bia,hadyears announced secured ago, put a a in 2006buyer late trial October out dateonly that $41.20 for it a slumped. Since 2001, the price has usualvamped after its the executive deal was compensation completed, policy,gramand hold provides requiring more stock that top officersand half tying of theto stock own re- stricted2005utives and will stock after, vest granted Disney’sonly if to the seniortop apprecia- five exec- ex- ecutivesshares representing will be required at least to 75 keep per- lies the putative cost of assembling pensive variety. known as Check 21, raised the hopes tled,Though it did he will answer step thedown lawsuit after the in trainedand I.B.M. in theto store same and kind retrieve of team- digi- bia,withThe announced the booth patent,” — in part late said ofOctober John the Chinese J. that Feld- it hadpatenttoday, secured at infringement $5.15 a an 2006 hour. trial lawsuit date against for a risen, to $500 each. Every year, PNC andawards hold tomore the stock performance and tying ofstock the utivestion of willthe company’svest only if shares, the apprecia- plus re- sharescent of representing the after-tax at gain least realized 75 per- all the items from the song “12 Days PNC Advisors’ news release elabo- thosepolicy,of DataTreasury people requiring say. topand officersother such to ownpat- merger,strictedcourt, calling stockMr. Liu, granted DataTreasury’s 60, will to seniorcontinue exec- pat- to workecutivestal images programs will of checks be that required canfor large be found to banks; keep at Academyhadhaus, secured a lawyer of a Sciences 2006 representing trial — date was Zions, for torn a patentfour companies, infringement including lawsuit the against Tele- offsets the swans’ variable cost by awardscompany’s to share the performance price. of the tioninvested of the dividends,company’s exceedsshares, plus that re- of centfrom of the the exercise after-tax of the gain options realized for of Skilled Christmas.” labor, This like year, the nine all ladiesthose rated: “The price for French hens andentWhile hold holders I.B.M.more because stock is full and it of gavetying M.B.A.’s, banksstock serveutivesents invalidaswill a member vest and only unenforceable.of if the the board. apprecia- In AmericansharesIngenico representing, a businessFrench manufacturer at schools, least 75 right per- of downpatentreferring in infringement 2001 to the to makebackground lawsuit way for material against a new fourCheck companies, division of includingFirst Data the and Tele- the calculating a core index that ex- company’sThe new sharepolicy price.is in addition to oth- investedthe Standard dividends, & Poor’s exceeds 500-stock that in- of fromat least the one exercise year. Disney’s of the options chief forex- goodsdancing, and wouldservices make would the have biggest set a and geese saw significant increases, Lenovoawardsbroader — to permission which the performance is still to shred partly of paper gov- the tionpapersMr. of Yang,the filed company’s ain serious-minded the United shares, States plus execu- Dis- re- downcentpayment ofto the the leaps card after-tax of terminals;faith gain — the realized back- and building.fourthat companies, patent But examinersit was including soon use rebuilt the to deter- Tele- and CheckNova Informationdivision of First Systems Data and division the cludes such cost anomalies. erThe compensation new policy is changes in addition the to board oth- thedex Standardover either & the Poor’s previous 500-stock year in-or atecutive least one will year. be Disney’s required chief to keep ex- buyerdent in back a budget, $66,334, at about $4,400, the up cost 4 per- of which may be due to fewer hatch- ernmentcompany’schecks and owned share keep electronicprice. — has onlyimages two of tiveinvestedtrict whoCourt dividends, helped for the fire Eastern exceeds up the District compa- that ofof wardfromSVPCO fallingthe, exercise the employee check of the and who options electronicis caught for nowCheckmine sits if division an like idea an ofisempty new.First artifact Data and along- the Novaof U.S. Information Bancorp. Systems division three-year time period. shares representing 100 percent of acent fully from loaded last sport year. utility The vehicle. 10 lords-a- lingsTaking during that this into breeding consideration, cycle cre- the membersthem.The newThe of policylaw the took senior is in effect addition management in late tooth- Oc- erny’sthemade compensation Standard sales in September force, & Poor’s willchanges to become 500-stockDisney’s the boardchair- bo- in- dexbyatclearing aleast overteam one either of service supportiveyear. the Disney’s previous division co-workers. chief year of ex- theor ecutivesideNovaBut the Informationbecause will headquarters be juries required Systems are of not Lenovo’s to divisionsympa- keep of U.S.The Bancorpnumber .of patent lawsuits re- nus plan, tying executive bonuses The new policy also requires the the gain for 12 months. leapingThat is wenta record up price 3 percent, for the 364 to atingPNC index an imbalance rose 3.1 percent, in the supply-roughly teamertober. compensation with an M.B.A. changes And none the boardof the mademan.dex over Ms. in SeptembereitherMa, who the led previous to the Disney’s talks year to bo-ac- or three-yearecutiveClearingAnd for willHouse those time be period.whoPayments required need a Company. jolt, to each keep sharesparentofthetic U.S. Bancorp tocompany, representing big corporations,. Legend 100 Holdings percent it is easy . of latedThe tonumber payment of patent processing lawsuits is re- ex- nusmore plan, closely tying to the executive company’s bonuses finan- topThe five new executives policy alsoto hold, requires over time, the theA gain shareholder for 12 months. lawsuit challenging tokens$4,039.08, of affection and the ranging 12 drummers from a demandin line with chain. the Turtledoves, 3.7 percent increase on the topmadeDataTreasury executives in September have is clearly ever to Disney’s worked hoping for bo-for quirethree-year I.B.M.’s time PC period. unit, is expected to morningsharesTo be representing sure, at 8:30 financial the 100 Lenovo services percent theme com- of forCriticsThe a companynumber now oflike worry patent DataTreasury that lawsuits Lenovo re- to latedpected to to payment grow rather processing than shrink, is ex- morecial performance. closely to the Thecompany’s plan also finan- re- topcompanypanies five executives routinely stock equal to sue hold, to onethree over another to time, five previous compensation policies is on partridgedrumming in arose pear 3.6 tree percent, to a dozen to otherin the hand, first 11 may months have registered had a more by anusa multinational bonanza. plan, tyingAccording corporation. executive to court bonuses docu- remainThe newas chief policy financial also requires officer. the songthe gain is for broadcast 12 months. on loudspeakers mustlatedcomeA shareholder find to across payment a way as tolawsuit a processingpreserve David challenging battling I.B.M.’s is ex- a pectedand industry to grow executives rather than say shrink, there cialducesA payment performance. the amount of Theprocessing options plan alsogranted re- companytimesover patent their stock baseinfringement, equal salary, to three depending and to com-five trial. Those policies resulted in the drummers$2,224.30. drumming. Still, the cost fruitfulthe Consumer breeding Price cycle, Index, creating which an morements,But closelyanalysts one of to the alsothe two company’s say law that firms Lenovo finan- origi- topLenovo’s five executives challenge to hold,will be over to meldtime, throughoutA shareholder the headquarters, lawsuit challenging urging previoustraditionspectedGoliath, to saidcompensation grow in Mr. a PCrather Bednarek, industry policies than the shrink, of is law- in-on andwill be industry a collective executives toll. As saymore there pat- ducesto executives, the amount shifting of options the majoritygranted timesonpanies the theirposition. like I.B.M. base salary,and Citigroup depending hold trial.former Those Disney policies president, resulted Michael in the S. isent upAmong holders only the slightly, stepassorted forward 1.6 fowl percent, named to exact over in oversupplymeasures aof much birds broaderand a 31 range percent of iscialnally no performance.pushover. hired to The file The company the plan lawsuits also is con- re- is radicallycompany stock different equal corporateto three to five cul- workersprevious tocompensation guide the corporate policies is ship on creasingandyer industry and competition former executives patent and say examiner. commod- there will be a collective toll. As more pat- toofsystem grants executives, to restrictedis shiftingguarded stock. the majority with onmultiple Thethe position. new patents pay planand collect “will help huge the li- formerOvitz, beingDisney grantedpresident, a Michael severance S. lastfees,the year’s song, “it’s like there total, a weredeathand compared variousby a thousand breed- with declinegoods and in price.” services. sideredducesworking the one foramount of a China’s contingency of options most success-feegranted of 40 tures.times their base salary, depending throughtrial. Those perilous policies waters. resulted in the itywill“Banks manufacturing. be a are collective inviting toll. targets, As more because pat- ent holders step forward to exact of grantsThe changes to restricted come as stock. Disney plans companycensingThe new fees. continue pay The plan differenceto attract “will help and is that there- Ovitz,package being of cash granted and stocka severance options thecuts,” 1984 said total, Octaviois 5.9 percent Marenzi, higher. who The release continued, “All told, fultopercent, executives, corporations. with a shifting cap For that years, the was majority for raised ex- on“Neither the position. culture should be the de former“Lenovo, Disney Lenovo, president, Lenovo,” Michael one line S. enttheyBut holders have Mr. aYang, step lot of forward Lenovo’s money to and current exact they fees, “it’s like a death by a thousand tozealThe replace changes and its longtimecomelawyers. as Disney chief execu- plans companytainthose the companies best continue employees run to patentattract while licensing and align- re- packagevalued at of$140 cash million and in stock 1995 optionsafter 14 cuts,”leadsPNC a said Advisors, technology Octavio a unit consulting Marenzi, of the PNC firmwho the cost of the birds in the Christmas ample,offrom grants $100 Lenovo’s to million restricted brandto $225 stock. hasmillion. outsold factoThe culture,” new pay said plan Martin “will Gilliland, help the goes,Ovitz, “we being are granted sailing a through severance the chieffees,can make “it’sexecutive, like settlements a saysdeath not by that to a worry. thousandare with- totive, replace Michael its D. longtime Eisner, who chief has execu- said tainingoperations theirthe best interests as employees part withof a business thosewhile ofalign- and our valuedmonthsin their at of noise$140 employment. million level that in 1995 it would after 14 be leadsFinancialthatCOMPANY caters a technology Services to banks. NAMES Group, consulting“Financial the Pitts- insti- firm Dell,TheSo far, Hewlett-Packardchanges two companiescome as Disney and have I.B.M. plans paid ancompany analyst continue at Gartner to attract Research. and re- wavespackage to of lands cash far and away. stock Lenovo, options cuts,”"We are said going Octavio to stick Marenzi, to the princi- who to replace its longtime chief execu- tive,tainhe will Michaelthe retirebest D.employees when Eisner, his who contractwhile has align- said ex- ingvaluedshareholders,”sometimes their at interests$140 waive million Judith fees with in if those1995 they L. after think Estrin, of our 14 it monthsleadsimpossibleThat a of trial technology employment. for is other scheduled groups consulting to to resume do,” firm he thatburgh-basedtutions caters are to justbanks. banking going “Financial to company, get insti- sued computersDataTreasury in China. to settle: Affiliated “They have to start a new one. Can Lenovo, Lenovo. We are building a ples of I.B.M. as a high-premium, tive, Michael D. Eisner, who has said heingpires will their in retire2006. interests The when company with his contract those said of it ourex-ex- shareholders,”monthschairwomanwill build of employment.a deeper of the Judith board’s relationship L. executive Estrin, with thatnextsaid.That caters month DataTreasury trial to in is banks. Delaware. scheduled “Financial is represented to resume insti- tutionsstartedmore and are tabulating more.” just going the gift to get package sued ComputerAnd even Services though, it one began of the as na- a theyTexas, develop Affiliated a new Computer Lenovo business accused new splendor.” high-value image, “ he said. “We’re he will retire when his contract ex- piresshareholders,” in 2006. The Judithcompany L. said Estrin, it ex- chairwomana customer, ofpatent the board’s experts executive said. For nexttutionsby Nix, month are Patterson in just Delaware. going & Roach to get of Dain- sued moretwo decades and more.” ago to see whether the state-ownedtion’s biggest enterprise, information Lenovo technol- has culture?DataTreasury That’s of one deceiving of the thekeys Pat- to LenovoThat trial is also is scheduled seeking the to best resume out- not going to make any compromises All 364 items in that alwayspires in 2006. been The entrepreneurial, company said it ana- ex- success.”chairwoman of the board’s executive sidenexta company advicemonth initlike canDelaware. DataTreasury, get, hiring a client these onmoregerfield, this." and Tex.,more.” a plaintiff’s law firm costs of the presents in the English ogy suppliers; and the RDM Corpo- ent and Trademark Office by with- experts said, the point seems to be to holding background materials that best known for the $17 billion award carol tracked the United States gov- song for $66,334, up ration, a small Canadian company walk away with as much money as it won for the state of Texas in tobac- ernment’s Consumer Price Index. would have shown that its ideas were that sells hardware and software for possible. co litigation. The general conclusion the firm has not new. 1.6% for the year. payment processing. (DataTreasury does have at least Several success stories may have drawn is that they usually do. DataTreasury, for its part, said in Two“It was a Patents nuisance lawsuit toLead us, to Numerous oneLawsuits processing client: Aimed Signature inspired at Banks copycats. In banking, the This year PNC Advisors found that court filings that the two patents and it was the most efficient decision Bank, a New York subsidiary of most prominent example of a patent the prices went up in the low single were the brainchild of its founder, an to settle it for a minimal amount,” Dallas Business Journal, which ground,Bank Hapoalim but they of doIsrael, assert said that that he it holderThe DataTreasury who made a suits business have out cast of digits on a percentage basis for classic totaled $4,201, just 1.5 percent Continuedsaid Lesley From Pool, First a spokeswoman Business Page for DataTreasuryinventor named has Claudio linked Ballard. to its Web The metused at DataTreasury least once with on apeople limited from ba- ansecuring unusually licensing wide net. fees Zions is Ronald Bancor- A. goods and remained steady for serv- more than the $4,138 it would have Affiliated Computer. She would not site,filings said are it was silent $50,000. on Mr. Ballard’s J.sis P. to Morgan store check Chase images and that and they let ap-cli- poration,Katz, whofor is expectedexample, towhose have NetDe- earned ices. cost a year ago.” asay patent the amount,on an aspect but an of article the process, in The professionalAs for RDM, credentials DataTreasury and issued back- propriatedents retrieve his them.) ideas. posit$2 billion subsidiary in fees by sells2009, when electronic some The flat prices for services, ac- Mr. Kleintop said the trumpeter but “even that arcane feature may a news release saying that the Cana- The list of DataTreasury’s defend- checkof his processing 52 patents technology, expire. Among has thein- cording to the group’s chief invest- swans could now and then really jolt be something that has been done be- dian company would pay a fee for ants appears somewhat random, giv- tervenedcompanies on that behalf have paid of Electronichim royal- ment strategist, Jeff Kleintop, reflect the index, because breeding cycles fore,” he said. “Patent officers aren’t each check imaging terminal it de- en that all major banks engage in Dataties are Systems, Bank ofsaying America, that Microsoft,it and not an hourly compensation anchored by vary and affect the price. In 1984, for necessarily experts. Almost certain- ploys and “a per-click royalty for check imaging and archiving, and DataTreasuryHewlett-Packard developed and Wells the Fargo. system a static minimum wage and the out- instance, the seven swans-a-swim- ly,Disney if they were aware Overhauls of this, they storage Its of electronic Policy documents on and Compensationthat myriad companies handle credit thatOther E.D.S. patent uses. holders are just start- sourcing of unskilled labor. ming called for in the song cost $1,000 wouldn’t allow someone to get a pat- check information, calculated at card transactions. Among them are ing“The to takeidea toof theelectronic courts. check LML Pay-pro- Hence, the eight maids-a-milking, each, but in subsequent years the BURBANK, Calif., Dec. 24 (AP) — pected to name a successor by June. compensation committee, said. ent on it.” around a 50 percent royalty rate.” Viewpointe Archive Services, a com- cessingments Systems, is quite aold, small and check there’s pro- a who earned $26.80 for the chore 20 price of the long-necked birds The Walt Disney Company has re- The new long-term incentive pro- For stock-option grants made in A new check processing law, Before Affiliated Computer set- pany set up by some major banks greatcessor deal in Vancouver, of prior artBritish associated Colum- years ago, put a buyer out only $41.20 slumped. Since 2001, the price has vamped its executive compensation gram provides that half of the re- 2005 and after, Disney’s top five ex- known as Check 21, raised the hopes tled, it did answer the lawsuit in and I.B.M. to store and retrieve digi- withbia, announced the patent,” in saidlate October John J. that Feld- it today, at $5.15 an hour. risen, to $500 each. Every year, PNC policy, requiring top officers to own stricted stock granted to senior exec- talecutives images will of checks be required for large tobanks; keep of DataTreasury and other such pat- court, calling DataTreasury’s pat- haus,had secured a lawyer a 2006 representing trial date Zions, for a Skilled labor, like the nine ladies offsets the swans’ variable cost by and hold more stock and tying stock utives will vest only if the apprecia- Ingenicoshares representing, a French manufacturer at least 75 per- of ent holders because it gave banks ents invalid and unenforceable. In referringpatent infringement to the background lawsuit material against dancing, would make the biggest calculating a core index that ex- awards to the performance of the tion of the company’s shares, plus re- paymentcent of the card after-tax terminals; gain realized and that patent examiners use to deter- broader permission to shred paper papers filed in the United States Dis- four companies, including the Tele- dent in a budget, at $4,400, up 4 per- cludes such cost anomalies. company’s share price. invested dividends, exceeds that of SVPCOfrom the, the exercise check of and the options electronic for mine if an idea is new. checks and keep electronic images of trict Court for the Eastern District of Check division of First Data and the cent from last year. The 10 lords-a- Taking that into consideration, the The new policy is in addition to oth- the Standard & Poor’s 500-stock in- clearingat least one service year. Disney’s division chief of theex- Nova Information Systems division them. The law took effect in late Oc- But because juries are not sympa- leaping went up 3 percent, to PNC index rose 3.1 percent, roughly tober.er compensation changes the board dex over either the previous year or Clearingecutive House will be Payments required Company. to keep theticof U.S. to Bancorp big corporations,. it is easy three-year time period. $4,039.08, and the 12 drummers in line with the 3.7 percent increase madeDataTreasury in September is clearly to Disney’s hoping for bo- sharesTo be sure, representing financial 100services percent com- of forThe a company number likeof patent DataTreasury lawsuits re-to paniesthe gain routinely for 12 months. sue one another drumming rose 3.6 percent, to in the first 11 months registered by anus bonanza. plan, According tying executive to court bonuses docu- The new policy also requires the comelated across to payment as a processingDavid battling is ex- a more closely to the company’s finan- Atop paymentfive executives processing to hold, over time, over patent infringement, and com- $2,224.30. the Consumer Price Index, which ments, one of the two law firms origi- A shareholder lawsuit challenging Goliath,pected tosaid grow Mr. ratherBednarek, than the shrink, law- cial performance. The plan also re- company stock equal to three to five panies like I.B.M. and Citigroup hold Among the assorted fowl named in measures a much broader range of nally hired to file the lawsuits is previous compensation policies is on yerand and industry former executives patent examiner. say there duces the amount of options granted systemtimes their is base guarded salary, depending with multiple patents and collect huge li- the song, there were various breed- goods and services. working for a contingency fee of 40 trial. Those policies resulted in the “Bankswill be aare collective inviting toll.targets, As more because pat- to executives, shifting the majority on the position. censing fees. The difference is that percent, with a cap that was raised former Disney president, Michael S. theyent holders have a lot step of forward money and to exact they of grants to restricted stock. zealThe newand pay lawyers. plan “will help the thoseOvitz, companies being granted run patent a severance licensing from $100 million to $225 million. canfees, make “it’s settlementslike a death thatby a arethousand with- The changes come as Disney plans company continue to attract and re- operationspackage of as cash part andof a stockbusiness options and incuts,” their said noise Octavio level that Marenzi, it would who be COMPANY NAMES So far, two companies have paid to replace its longtime chief execu- tain the best employees while align- sometimesvalued at $140 waive million fees inif they1995 thinkafter 14it impossibleleads a technology for other groups consulting to do,” firm he DataTreasury to settle: Affiliated tive, Michael D. Eisner, who has said ing their interests with those of our willmonths build of a employment. deeper relationship with said.that caters DataTreasury to banks. “Financial is represented insti- Computer Services, one of the na- Texas, Affiliated Computer accused he will retire when his contract ex- shareholders,” Judith L. Estrin, a customer,That trial patent is scheduled experts tosaid. resume For bytutions Nix, Patterson are just going & Roach to get of Dain- sued tion’s biggest information technol- DataTreasury of deceiving the Pat- pires in 2006. The company said it ex- chairwoman of the board’s executive anext company month like in Delaware. DataTreasury, these gerfield,more and Tex., more.” a plaintiff’s law firm ogy suppliers; and the RDM Corpo- ent and Trademark Office by with- experts said, the point seems to be to holding background materials that best known for the $17 billion award ration, a small Canadian company walk away with as much money as it won for the state of Texas in tobac- would have shown that its ideas were that sells hardware and software for possible. co litigation. not new. payment processing. (DataTreasury does have at least Several success stories may have “It was a nuisance lawsuit to us, DataTreasury, for its part, said in one processing client: Signature inspired copycats. In banking, the and it was the most efficient decision court filings that the two patents Bank, a New York subsidiary of most prominent example of a patent to settle it for a minimal amount,” were the brainchild of its founder, an Bank Hapoalim of Israel, said that it holder who made a business out of said Lesley Pool, a spokeswoman for inventor named Claudio Ballard. The used DataTreasury on a limited ba- securing licensing fees is Ronald A. Affiliated Computer. She would not filings are silent on Mr. Ballard’s sis to store check images and let cli- Katz, who is expected to have earned say the amount, but an article in The professional credentials and back- ents retrieve them.) $2 billion in fees by 2009, when some of his 52 patents expire. Among the companies that have paid him royal- ties are Bank of America, Microsoft, Hewlett-Packard and Wells Fargo. Disney Overhauls Its Policy on Compensation Other patent holders are just start- ing to take to the courts. LML Pay- BURBANK, Calif., Dec. 24 (AP) — pected to name a successor by June. compensation committee, said. ments Systems, a small check pro- The Walt Disney Company has re- The new long-term incentive pro- For stock-option grants made in cessor in Vancouver, British Colum- vamped its executive compensation gram provides that half of the re- 2005 and after, Disney’s top five ex- bia, announced in late October that it policy, requiring top officers to own stricted stock granted to senior exec- ecutives will be required to keep had secured a 2006 trial date for a and hold more stock and tying stock utives will vest only if the apprecia- shares representing at least 75 per- patent infringement lawsuit against awards to the performance of the tion of the company’s shares, plus re- cent of the after-tax gain realized four companies, including the Tele- company’s share price. invested dividends, exceeds that of from the exercise of the options for Check division of First Data and the The new policy is in addition to oth- the Standard & Poor’s 500-stock in- at least one year. Disney’s chief ex- Nova Information Systems division er compensation changes the board dex over either the previous year or ecutive will be required to keep of U.S. Bancorp. made in September to Disney’s bo- three-year time period. shares representing 100 percent of The number of patent lawsuits re- nus plan, tying executive bonuses The new policy also requires the the gain for 12 months. lated to payment processing is ex- more closely to the company’s finan- top five executives to hold, over time, A shareholder lawsuit challenging pected to grow rather than shrink, cial performance. The plan also re- company stock equal to three to five previous compensation policies is on and industry executives say there duces the amount of options granted times their base salary, depending trial. Those policies resulted in the will be a collective toll. As more pat- to executives, shifting the majority on the position. former Disney president, Michael S. ent holders step forward to exact of grants to restricted stock. The new pay plan “will help the Ovitz, being granted a severance fees, “it’s like a death by a thousand The changes come as Disney plans company continue to attract and re- package of cash and stock options cuts,” said Octavio Marenzi, who to replace its longtime chief execu- tain the best employees while align- valued at $140 million in 1995 after 14 leads a technology consulting firm tive, Michael D. Eisner, who has said ing their interests with those of our months of employment. that caters to banks. “Financial insti- he will retire when his contract ex- shareholders,” Judith L. Estrin, That trial is scheduled to resume tutions are just going to get sued pires in 2006. The company said it ex- chairwoman of the board’s executive next month in Delaware. more and more.” ID NAME: Nxxx,2004-12-25,C,002,Bs-BW,E2 3 7 15 25 50 75 85 93 97

Chinese Buyer of PC Unit Ernst & Young to Pay U.S. Is Moving to I.B.M.’s Town Over Bank Collapse in ’01

lysts say. It was one of the first com- HINSDALE, Ill., Dec. 24 (AP) — scores our commitment to work co- Continued From First Business Page panies here to list its shares in Hong The accounting firm Ernst & Young operatively with regulators and to Kong. It was among the first to re- has agreed to pay $125 million to the ensure that we have the strongest I.B.M., which operates in more than ward its employees with stock op- Federal Deposit Insurance Corpora- policies and procedures to serve our 150 countries and had $9 billion in tions, which have turned some of its tion over the collapse of a suburban clients and the public interest.” revenue in 2003. top executives into millionaires. Chicago bank three years ago, the The Ernst & Young agreement in- Preparations are already under The company’s identity was F.D.I.C. announced Friday. volved two settlements: one for $40 way in Beijing. For the last few shaped, in part, by its visionary The failure of Superior Bank, million with the F.D.I.C. and another months, all vice presidents have chairman, Mr. Liu, who in 1984 based in Hinsdale, cost the F.D.I.C. for $85 million involving enforce- been required to study English for at helped found Lenovo with a group of about $700 million, making it one of ment claims by the Treasury’s Of- least one hour a day. The chairman scientists from the Chinese Academy the largest federally insured finan- fice of Thrift Supervision, which says he has read books about Bill of Sciences. cial institutions to fail in a decade. closed Superior on July 27, 2001. The Gates and Andrew Grove. And the Early on, it was the hard-charging Investigators for the Treasury De- F.D.I.C. said that it would receive chief executive of Lenovo has agreed Mr. Liu who persuaded the Chinese partment, the F.D.I.C. and Congress both amounts. to give up day-to-day management of government to give the company blamed the risky business strategies “We still expect to lose money be- the company to assume the role of greater control over its hiring and of Superior’s management for the cause of this failure, but this will go a chairman. salary decisions, allowing the state- collapse, but they also cited failures long way in recouping as much as His task will be to fly back and owned company to raise capital from on the part of Superior’s outside au- possible,” an F.D.I.C. spokesman, diting firm, Ernst & Young. The forth from Beijing to New York to outside investors and essentially op- David Barr. He said some of the set- F.D.I.C. accused the firm of negli- tlement would eventually reach unin- consult with Lenovo’s newly named erate like a private company. gence and concealing the bank’s true sured depositors who lost money in chief executive, Stephen M. Ward Jr., Later, Mr. Liu won government financial conditions. Superior’s collapse. the senior vice president and general approval to list the company’s stock Under the agreement announced Superior Bank claimed about $2.3 manager of I.B.M.’s Personal Sys- in Hong Kong and for Lenovo to start Friday, Ernst & Young did not admit billion in assets at the time and was tems Group. producing its own computers, rather any liability. owned by the multibillionaire Pritzk- Many analysts were surprised by than simply marketing Western brands. A spokesman for Ernst & Young, er family and a New York developer. Charles Perkins, said the firm had By 1997, with its own brand of low- The Pritzkers agreed to a $460 mil- already made changes to its auditing cost Chinese-character-friendly lion voluntary settlement in 2001 that practices, including adding more computers, Lenovo was suddenly barred government action against A new work agenda: technical resources and increasing the owners. The owners admitted no China’s biggest computer maker. its requirements for training and ex- liability. So far, the Pritzkers have Mr. Liu, a military academy grad- Miranda Mimi Kuo for The New York Times studying English and perience. paid about $175 million under the set- uate who suffered through China’s Liu Chuanzhi, chairman of Lenovo and one of its founders, said that ac- “Our decision to reach these settle- tlement’s payment schedule, Mr. brutal Cultural Revolution, said he quiring the international business skills of I.B.M. managers was one of handing out birthday ments,” Mr. Perkins said, “under- Barr said. often ran the company with an iron the big attractions of the deal for the personal computer division. cakes. fist, scolding workers who showed up late for meetings and pushing scien- In recent years, Lenovo officials roster that includes Goldman, tists and executives to deliver on say the company’s corporate culture Sachs; McKinsey & Company, the their promises. has evolved from what some compa- consulting firm; Weil, Gotshal & Birds and Dancing Ladies Lenovo’s decision to outsource its “All the people were scientists in ny officials called the “semimilitary” Manges, the New York law firm; and management to New York. those days,” Mr. Liu recalled. “They culture that prevailed in the early Ogilvy, the public relations firm. “I admire what Lenovo is doing,” were very casual. They’d always be days, to a more easy-going and hip And the new language for the com- Skew the ‘12 Days’ Index said Joe Zhang, a UBS analyst who late for meetings and they’d make high-tech culture. pany is English, company officials follows Lenovo. “Many Lenovo exec- their promises. So we decided that if These days, Lenovo’s new corpo- say. based price differentials. Swans, utives have decided to do this at the anyone was late they’d stand up for rate headquarters in Beijing’s “Sili- Lenovo officials say they are By ELIZABETH OLSON doves, partridges and calling birds expense of their careers. They’re one minute.” con Suburb” is teaming with young studying American business history, (today’s canaries) cost about the putting personal ego behind for the Along the way, Mr. Liu also 20- and 30-somethings, casually and the chief executive lists The Har- same as last year, according to infor- greater good of the company.” WASHINGTON, Dec. 24 — Maids- groomed a cadre of loyal and fierce dressed, chattering into mobile vard Business Review as part of his mation from the Cincinnati Zoo and People involved in the negotiations executives, including Yang Yuanq- a-milking, gold rings and turtledoves phones and looking confident. regular reading. Botanical Gardens. with I.B.M. said that Lenovo officials ing, 42, who is now the company’s were a relative bargain this year, but The halls are decked with employ- In fact, like other computer and But the price of French hens, saw no other choice. They recognized chief executive, and Mary Ma, 52, anyone who shopped for French ee recognition plaques, business software giants, Lenovo is even fan- which are a slightly more exotic ver- that Lenovo could not simply take Lenovo’s highly respected chief fi- hens, geese and ladies dancing may school theorems and New Age philos- ning its own myths. In 1984, the com- sion of American hens, went up 200 over a much bigger I.B.M. PC unit nancial officer. have been in for a touch of sticker ophy: “Happiness,” reads one work- pany was formed in a small, con- shock. percent, Mr. Kleintop said, largely and run it from Beijing. But just how the new company’s place poster. “Work hard and live crete security guard’s booth that be- So said PNC Advisors, the wealth because American breeders of That is why a major theme of the management will take shape in Bei- art,” reads another. came its first laboratory and head- management firm that each year tal- French hens introduced a more ex- talks was how to keep business as jing and New York is still unclear. Newcomers to Lenovo are even quarters. lies the putative cost of assembling pensive variety. usual after the deal was completed, Though he will step down after the trained in the same kind of team- The booth — part of the Chinese all the items from the song “12 Days PNC Advisors’ news release elabo- those people say. merger, Mr. Liu, 60, will continue to work programs that can be found at Academy of Sciences — was torn of Christmas.” This year, all those rated: “The price for French hens While I.B.M. is full of M.B.A.’s, serve as a member of the board. American business schools, right down in 2001 to make way for a new goods and services would have set a and geese saw significant increases, Lenovo — which is still partly gov- Mr. Yang, a serious-minded execu- down to the leaps of faith — the back- building. But it was soon rebuilt and buyer back $66,334, about the cost of which may be due to fewer hatch- ernment owned — has only two tive who helped fire up the compa- ward falling employee who is caught now sits like an empty artifact along- lings during this breeding cycle cre- members of the senior management ny’s sales force, will become chair- by a team of supportive co-workers. side the headquarters of Lenovo’s a fully loaded sport utility vehicle. ating an imbalance in the supply- team with an M.B.A. And none of the man. Ms. Ma, who led the talks to ac- And for those who need a jolt, each parent company, Legend Holdings. That is a record price for the 364 demand chain. Turtledoves, on the top executives have ever worked for quire I.B.M.’s PC unit, is expected to morning at 8:30 the Lenovo theme Critics now worry that Lenovo tokens of affection ranging from a other hand, may have had a more a multinational corporation. remain as chief financial officer. song is broadcast on loudspeakers must find a way to preserve I.B.M.’s partridge in a pear tree to a dozen But analysts also say that Lenovo Lenovo’s challenge will be to meld throughout the headquarters, urging traditions in a PC industry of in- drummers drumming. Still, the cost fruitful breeding cycle, creating an is no pushover. The company is con- radically different corporate cul- workers to guide the corporate ship creasing competition and commod- is up only slightly, 1.6 percent, over oversupply of birds and a 31 percent sidered one of China’s most success- tures. through perilous waters. ity manufacturing. last year’s total, and compared with decline in price.” ful corporations. For years, for ex- “Neither culture should be the de “Lenovo, Lenovo, Lenovo,” one line But Mr. Yang, Lenovo’s current the 1984 total, is 5.9 percent higher. The release continued, “All told, ample, Lenovo’s brand has outsold facto culture,” said Martin Gilliland, goes, “we are sailing through the chief executive, says not to worry. PNC Advisors, a unit of the PNC the cost of the birds in the Christmas Dell, Hewlett-Packard and I.B.M. an analyst at Gartner Research. waves to lands far away. Lenovo, "We are going to stick to the princi- Financial Services Group, the3 Pitts- computers in China. “They have to start a new one. Can Lenovo, Lenovo. We are building a ples of I.B.M. as a high-premium, burgh-based banking company, And even though it began as a they develop a new Lenovo business new splendor.” high-value image, “ he said. “We’re started tabulating the gift package state-owned enterprise, Lenovo has culture? That’s one of the keys to Lenovo is also seeking the best out- not going to make any compromises two decades ago to see whether the All 364 items in that always been entrepreneurial, ana- success.” side advice it can get, hiring a client on this." costs of the presents in the English carol tracked the United States gov- song for $66,334, up ernment’s Consumer Price Index. The general conclusion the firm has 1.6% for the year. drawn is that they usually do. Two Patents Lead to Numerous Lawsuits Aimed at Banks This year PNC Advisors found that the prices went up in the low single Dallas Business Journal, which ground, but they do assert that he The DataTreasury suits have cast digits on a percentage basis for classic totaled $4,201, just 1.5 percent Continued From First Business Page DataTreasury has linked to its Web met at least once with people from an unusually wide net. Zions Bancor- goods and remained steady for serv- more than the $4,138 it would have site, said it was $50,000. J. P. Morgan Chase and that they ap- poration, for example, whose NetDe- ices. cost a year ago.” a patent on an aspect of the process, As for RDM, DataTreasury issued propriated his ideas. posit subsidiary sells electronic The flat prices for services, ac- Mr. Kleintop said the trumpeter but “even that arcane feature may a news release saying that the Cana- The list of DataTreasury’s defend- check processing technology, has in- cording to the group’s chief invest- swans could now and then really jolt be something that has been done be- dian company would pay a fee for ants appears somewhat random, giv- tervened on behalf of Electronic ment strategist, Jeff Kleintop, reflect the index, because breeding cycles fore,” he said. “Patent officers aren’t each check imaging terminal it de- en that all major banks engage in Data Systems, saying that it and not an hourly compensation anchored by vary and affect the price. In 1984, for necessarily experts. Almost certain- ploys and “a per-click royalty for check imaging and archiving, and DataTreasury developed the system a static minimum wage and the out- instance, the seven swans-a-swim- ly, if they were aware of this, they storage of electronic documents and that myriad companies handle credit that E.D.S. uses. sourcing of unskilled labor. ming called for in the song cost $1,000 wouldn’t allow someone to get a pat- check information, calculated at card transactions. Among them are “The idea of electronic check pro- Hence, the eight maids-a-milking, each, but in subsequent years the ent on it.” around a 50 percent royalty rate.” Viewpointe Archive Services, a com- cessing is quite old, and there’s a who earned $26.80 for the chore 20 price of the long-necked birds A new check processing law, Before Affiliated Computer set- pany set up by some major banks great deal of prior art associated years ago, put a buyer out only $41.20 slumped. Since 2001, the price has known as Check 21, raised the hopes tled, it did answer the lawsuit in and I.B.M. to store and retrieve digi- with the patent,” said John J. Feld- today, at $5.15 an hour. risen, to $500 each. Every year, PNC tal images of checks for large banks; of DataTreasury and other such pat- court, calling DataTreasury’s pat- haus, a lawyer representing Zions, Skilled labor, like the nine ladies offsets the swans’ variable cost by Ingenico, a French manufacturer of ent holders because it gave banks ents invalid and unenforceable. In referring to the background material dancing, would make the biggest calculating a core index that ex- payment card terminals; and that patent examiners use to deter- broader permission to shred paper papers filed in the United States Dis- dent in a budget, at $4,400, up 4 per- cludes such cost anomalies. SVPCO, the check and electronic checks and keep electronic images of trict Court for the Eastern District of mine if an idea is new. Taking that into consideration, the clearing service division of the cent from last year. The 10 lords-a- them. The law took effect in late Oc- But because juries are not sympa- leaping went up 3 percent, to PNC index rose 3.1 percent, roughly Clearing House Payments Company. thetic to big corporations, it is easy tober. $4,039.08, and the 12 drummers in line with the 3.7 percent increase DataTreasury is clearly hoping for To be sure, financial services com- for a company like DataTreasury to panies routinely sue one another drumming rose 3.6 percent, to in the first 11 months registered by a bonanza. According to court docu- come across as a David battling a A payment processing over patent infringement, and com- $2,224.30. the Consumer Price Index, which ments, one of the two law firms origi- Goliath, said Mr. Bednarek, the law- panies like I.B.M. and Citigroup hold Among the assorted fowl named in measures a much broader range of nally hired to file the lawsuits is yer and former patent examiner. system is guarded with multiple patents and collect huge li- the song, there were various breed- goods and services. working for a contingency fee of 40 “Banks are inviting targets, because censing fees. The difference is that they have a lot of money and they percent, with a cap that was raised zeal and lawyers. those companies run patent licensing from $100 million to $225 million. can make settlements that are with- operations as part of a business and in their noise level that it would be COMPANY NAMES So far, two companies have paid sometimes waive fees if they think it impossible for other groups to do,” he DataTreasury to settle: Affiliated will build a deeper relationship with Texas, Affiliated Computer accused said. DataTreasury is represented Computer Services, one of the na- a customer, patent experts said. For DataTreasury of deceiving the Pat- by Nix, Patterson & Roach of Dain- tion’s biggest information technol- a company like DataTreasury, these gerfield, Tex., a plaintiff’s law firm ogy suppliers; and the RDM Corpo- ent and Trademark Office by with- experts said, the point seems to be to holding background materials that best known for the $17 billion award ration, a small Canadian company walk away with as much money as it won for the state of Texas in tobac- would have shown that its ideas were that sells hardware and software for possible. co litigation. not new. payment processing. (DataTreasury does have at least Several success stories may have “It was a nuisance lawsuit to us, DataTreasury, for its part, said in one processing client: Signature inspired copycats. In banking, the and it was the most efficient decision court filings that the two patents Bank, a New York subsidiary of most prominent example of a patent to settle it for a minimal amount,” were the brainchild of its founder, an Bank Hapoalim of Israel, said that it holder who made a business out of said Lesley Pool, a spokeswoman for inventor named Claudio Ballard. The used DataTreasury on a limited ba- securing licensing fees is Ronald A. Affiliated Computer. She would not filings are silent on Mr. Ballard’s sis to store check images and let cli- Katz, who is expected to have earned say the amount, but an article in The professional credentials and back- ents retrieve them.) $2 billion in fees by 2009, when some of his 52 patents expire. Among the companies that have paid him royal- ties are Bank of America, Microsoft, Hewlett-Packard and Wells Fargo. Disney Overhauls Its Policy on Compensation Other patent holders are just start- ing to take to the courts. LML Pay- BURBANK, Calif., Dec. 24 (AP) — pected to name a successor by June. compensation committee, said. ments Systems, a small check pro- The Walt Disney Company has re- The new long-term incentive pro- For stock-option grants made in cessor in Vancouver, British Colum- vamped its executive compensation gram provides that half of the re- 2005 and after, Disney’s top five ex- bia, announced in late October that it policy, requiring top officers to own stricted stock granted to senior exec- ecutives will be required to keep had secured a 2006 trial date for a and hold more stock and tying stock utives will vest only if the apprecia- shares representing at least 75 per- patent infringement lawsuit against awards to the performance of the tion of the company’s shares, plus re- cent of the after-tax gain realized four companies, including the Tele- company’s share price. invested dividends, exceeds that of from the exercise of the options for Check division of First Data and the The new policy is in addition to oth- the Standard & Poor’s 500-stock in- at least one year. Disney’s chief ex- Nova Information Systems division er compensation changes the board dex over either the previous year or ecutive will be required to keep of U.S. Bancorp. made in September to Disney’s bo- three-year time period. shares representing 100 percent of The number of patent lawsuits re- nus plan, tying executive bonuses The new policy also requires the the gain for 12 months. lated to payment processing is ex- more closely to the company’s finan- top five executives to hold, over time, A shareholder lawsuit challenging pected to grow rather than shrink, cial performance. The plan also re- company stock equal to three to five previous compensation policies is on and industry executives say there duces the amount of options granted times their base salary, depending trial. Those policies resulted in the will be a collective toll. As more pat- to executives, shifting the majority on the position. former Disney president, Michael S. ent holders step forward to exact of grants to restricted stock. The new pay plan “will help the Ovitz, being granted a severance fees, “it’s like a death by a thousand The changes come as Disney plans company continue to attract and re- package of cash and stock options cuts,” said Octavio Marenzi, who to replace its longtime chief execu- tain the best employees while align- valued at $140 million in 1995 after 14 leads a technology consulting firm tive, Michael D. Eisner, who has said ing their interests with those of our months of employment. that caters to banks. “Financial insti- he will retire when his contract ex- shareholders,” Judith L. Estrin, That trial is scheduled to resume tutions are just going to get sued pires in 2006. The company said it ex- chairwoman of the board’s executive next month in Delaware. more and more.”