IBM Corp is set to essentially shut down its home PC division after failing to make an impact on the consumer market, according to the Wall Street Journal. The move, which threatens the jobs of possibly hundreds of people involved in design and marketing, is the result of poor sales pushing up unit costs with the result that IBM loses hundreds of dollars on each Aptiva home computer it sells, leading to total losses estimated at about $300m this year. With sub-$1,000 PCs now accounting for 40% of US computer sales, IBM’s machines have become hopelessly noncompetitive. The remnants of the consumer division are expected to be folded into the business PC operation in the hopes that the Aptiva line can be revived and the consolidation of the two divisions will drastically reduce costs. James Firestone, who was hired two years ago to head the consumer division, will now become general manager of consumer solutions in the overhauled division, but will apparently lose control of design manufacturing and other management responsibilities for the Aptiva line. IBM plans to launch an Aptiva priced at $1,000 in November.
