IBM To Pull PCs Out Of Stores

It's the end of an era. IBM -- the company that pioneered the home computer in the 1980s -- said Tuesday it will pull its line of money-losing PCs from U.S. stores. The company will sell them exclusively over the Internet.

Aptiva PCs will disappear from shelves starting Jan. 1. IBM's ThinkPad laptops, which are profitable, will continue to be available in stores.

IBM's Personal Systems Group, which sells PCs to both consumers and businesses, lost about $150 million in the second quarter and nearly $1 billion last year.

"We don't know what the problem is, but we need to go back to the drawing boards and figure it out," said spokeswoman Trink Guarino.

By withdrawing its PCs from the shelves, IBM will save money on the fees stores typically charge to display and promote products.

IBM, the nation's third-largest PC maker, is the latest technology company to be squeezed by price wars and a surge in component costs.

Dell Computer Corp. warned on Monday its third-quarter profits will be hurt by rising chip prices stemming from the Taiwan earthquake last month.

IBM's cost-cutting comes two weeks after the company said it would cut up to 10 percent of the 10,000-member staff in its PC business as it consolidates several brands under one marketing umbrella.

IBM pioneered the home computer in the early 1980s when it started selling an affordable box-like device that sat on people's desks. Even though IBM was quickly overtaken by sellers of cheaper PCs, such as Compaq Computer Corp., many home computers have long been known as "IBM clones."

To differentiate its products, IBM introduced the Aptiva in 1994. But some analysts have suggested IBM simply stop selling personal computers.