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IBM Reassures Workers After Milestone China Deal

"There's lots of room for innovation on both sides," she said. "Our customers tell us that [design] is the number-one reason they buy from IBM, and that's going to continue."

O'Sullivan cited laptop "air bags" -- which protect the computer's hard-drive in the event of a fall -- as a feature that has proved popular among IBM business customers and could be engineered into Lenovo's consumer line.


Lenovo Chairman Liu Chuanzhi and John Joyce, senior vice president and group executive of IBM Global Services, at a Beijing news briefing. (Lenovo Via AP)

_____In Today's Post_____
IBM Stops Offering Cash-Balance Pension (The Washington Post, Dec 9, 2004)
_____Background_____
IBM Sells PC Business to Chinese Firm in $1.75 Billion Deal (The Washington Post, Dec 8, 2004)
IBM Deal Puts Lenovo on Global Stage (The Washington Post, Dec 8, 2004)
_____Special Report_____
Globalization and Its Critics
In-depth Reports by Region
World News and Updates
_____Tech Jobs Headlines_____
AOL Cuts 750 Jobs; Most Are in Virginia (The Washington Post, Dec 8, 2004)
This Holiday, Shopping for Gifts and Jobs (The Washington Post, Nov 28, 2004)
Biding Time Doing the Bare Minimum (The Washington Post, Nov 28, 2004)
TechNews.com: Jobs

Daniel Reed, vice chancellor of information technology at the University of North Carolina at Chapel Hill, said the IBM-Lenovo partnership is all about using globalization to rise to where the profit is. For IBM, it's a chance to at least partially escape the low-margin PC business and focus on more lucrative lines. For Lenovo, it's an opportunity to move higher by gaining access to IBM's business customers, who will receive pitches from IBM salesmen to buy Lenovo computers. "The real challenge is how to climb farther up the value chain," he said.

It's a challenge American companies are feeling acutely these days, as new entrants from abroad prove they can compete at the high end just as well as they can at the low end. Research Triangle Park itself has taken on a much more international complexion in recent years. Founded in 1959 in an attempt to capitalize economically on the local presence of cutting-edge research universities such as Duke, UNC and North Carolina State, the park has become home to numerous high-profile companies from Europe and Japan.

Until now, however, China hasn't been a major player here. News of Lenovo's arrival was greeted warmly Wednesday by local economic development leaders.

"We're glad they're here. If anything, it solidifies the park's reputation as a global player," said Charles Hayes, president and chief executive of the Research Triangle Regional Partnership.

But Hayes said it's also a sign that other countries, China especially, represent genuine competition in the realm of technological development.

"The U.S. has always led the world in innovation," he said. "But that doesn't mean there aren't going to be other places that are doing some pretty sophisticated stuff. And China will be one of those places. They invented gunpowder, after all, so it's an innovative country."

Researcher Bob Lyford contributed to this report.


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