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February 16, 1989

IBM HAS SIGNIFICANT IMPROVEMENT IN GROSS MARGINS ON HARDWARE SALES

By CBR Staff Writer

Preview copies of IBM’s annual report show that the company managed a significant improvement in gross margins on hardware sales – which account for two thirds of its total business – in 1988 over 1987: gross margins on hardware improved to 56.2% from 52.3%, and overall gross margins to 57% from 54.5%; in other news, processor sales last year rose 8.5%, peripherals sales rose 10.7% after falling 5.7% in 1987, and workstation sales – PS/2s and RTs in the main, rose 9.1% – but fell 5.4% in the US, although IBM stresses that PS/2 sales were up everywhere (which they should have been because the line didn’t start shipping until mid-1987); US sales, as reported, fell about 0.8% in the US to $25,300m – but soared 27.7% in Asia/Pacific group, a more modest 10.3% here in Europe.

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