Fujitsu Spins Off Its PC And Mobile Divisions

by CXOtoday News Desk    Dec 27, 2015

fujitsu

Fujitsu is planning to spin off its PC and phone businesses by February 2016 in an attempt to create more efficient businesses that can better compete in the highly competitive markets. The spinoff will create two new companies: the first, Fujitsu Client Computing Limited, having its laptop and desktop divisions; the second, Fujitsu Connected Technologies, will contain its mobile phone division. Fujitsu will continue to own both companies at present, the company said.

According to experts, it has become too difficult to carve out its own niche within both markets—and without something unique to offer, its profit margins have presumably deteriorated. “With the ongoing commoditization of ubiquitous products, mainly of PCs and smart phones, it has become increasingly difficult to achieve differentiation, and competition with emerging global vendors has intensified,” the company said in a statement.

Other PC and phone makers reeling under similar pressure and are chalking out survival strategies. Hewlett-Packard, for example, completed its own spinoff of its PC business this past November. 

Recent reports have suggested that Fujitsu, Toshiba, and Vaio, which was previously part of Sony could all merge their PC businesses to form one more formidable force. According to an article in The Verge, Japan’s ailing PC makers Fujitsu, Toshiba, and Vaio (Sony) are now looking to consider joining together instead of failing apart.

Fujitsu said it had instituted each of the “company splits” to “clarify management accountability, to enable swift management decisions, and to pursue comprehensive efficiency by creating independent companies for the PC business and the mobile phones business, respectively”. It also wants to establish an integrated system covering all aspects of research, development, design, manufacturing, sales, planning, and after-sales services, it said.

For its fiscal year ending in March, Fujitsu’s PC business recorded $2.5 billion in revenue and its phone business had recorded $1.3 billion and neither of them reached the top 5 slots.  Analyst firm IDC said recently that it expects worldwide PC shipments to fall 10 percent in the fourth quarter of 2015, for an overall decline in the worldwide PC market of 10.3 percent.

“With demand expected to remain soft in the next quarter, 2015 is shaping up to be an abysmal year for the global PC market,”  Linn Huang, IDC’s research director of devices and displays, said in a statement. “2016 will likely bring further contractions, but we expect some stabilization shortly thereafter.”