Fujitsu opens its kimono to Lenovo in PC deal

AcquisitionsFujitsu
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But it’s not the lock, stock and barrel deal that many PC watchers perhaps expected

Fujitsu and Lenovo have announced today that they are “exploring a strategic cooperation” in the “realm of research, development, design and manufacturing of PCs” for the global market.

Earlier this month, it was widely reported that Lenovo was in talks to buy the Fujitsu PC business lock, stock and barrel. But maybe the cultural nuances and rivalry in the region dictated that a Chinese company buying a Japanese competitor went too far?

Lenovo Store“Details of the cooperation are currently under discussion”, said the two potential partners. Fujitsu transferred its Japan PC business to FCCL, a wholly owned subsidiary of Fujitsu, on 1 February 2016. Since then, Fujitsu has been considering various options to “ensure the future growth of its [declining] PC business”.

Lenovo, already the world’s largest PC supplier, is “continuously seeking opportunities to further grow its core business in the global market”, said the pair. Through the “cooperation”, the two companies aim to create a “successful model” that leverages Fujitsu’s global sales, customer support, R&D and manufacturing capabilities, together with Lenovo’s “operational excellence” to “improve competitiveness” in the “dynamic [and rapidly declining] global PC market”.

Fujitsu said it will continue to offer a “high-quality, innovative and reliable Fujitsu-branded PC portfolio” and the related after-sales support to customers and channel partners worldwide.

“Fujitsu and Lenovo will continue their discussion in pursuit of a mutually beneficial collaboration”, they said. The two companies are also in talks with Development Bank of Japan for the bank to provide “financial and strategic support”.

Makes you wonder though what exactly will be changing as far as Fujitsu’s PCs are concerned.

Around the same time as the love bird talk, Fujitsu reported falling global sales in the second quarter. Consolidated revenue for the second quarter of fiscal 2016 was 1,098.5 billion yen, down 77.6 billion yen from the second quarter of fiscal 2015.

Fujitsui-Logo-247x180Revenue outside of Japan decreased 18.8 percent. In addition to a decline in revenue from infrastructure services in Europe, and a decline in revenue from network products in North America, results were also “significantly impacted” by foreign exchange movements.

Fujitsu recorded an operating profit of 37.1 billion yen, up 22.2 billion yen from the second quarter of fiscal 2015. Overall operating profit improved because of cost reductions and improving cost efficiency in PCs and mobile phones, said Fujitsu, and because operating profits from network products in Japan benefited from higher revenues, said the firm.

Revenue in the Technology Solutions segment amounted to 746.3 billion yen, a decrease of 6.6 percent from the second quarter of fiscal 2015. Revenue outside Japan fell 22.6 percent. In the Services sub-segment, revenue fell as a result of “weak sales” in Europe and the US, in addition to the impact of foreign exchange movements.

Fujitsu recently said it intended to make around 1,800 UK services staff redundant next year, as reported on ChannelBiz.

@AntonySavvas