Global PC market rationalises even further.
Vaio Corporation is expected to strike a deal to combine with Toshiba’s and Fujitsu’s PC divisions by the end of March, according to the CEO of Japan Industrial Partners, (JIP) Hidemi Moue. JIP is the buyout fund that now controls the former arm of Sony.
Moue added that he also expects Vaio to own the biggest stake in the merged company, which will contribute to savings on research and development and scale production.
Vaio was the personal computer business spun off from Sony in 2014, which has been closing in on a three-way merger with rivals to create a producer that can dominate Japan and survive a shrinking global PC market.
“The PC market is shrinking, which means there are merits in working together to make the most of research, production volumes and marketing channels,” Moue said, whose fund specialises in corporate turnarounds. “We can do it with minimal cannibalisation.”
According to global media reports, the potential venture would focus on the Japanese domestic market and stick to its core business of making PCs. However Moue added that targeting overseas markets with other forms of hardware remains a possibility, considering Vaio’s recent release of a Windows 10 smartphone and plans for a robot companion product..
Vaio, Toshiba and Fujitsu watched as their global market share dived as Lenovo Group, HP and Dell moved up. Yet even the leaders are struggling: PC shipments shrank 10% last year, falling below 300 million units for the first time since 2008, according to researcher IDC. The market is also expected to decline through 2016.
NEC Lenovo controlled about 29% of PC shipments in Japan from July to September, according to IDC. Fujitsu and Toshiba followed with 17% and 12%, respectively, while Vaio doesn’t disclose sales numbers.
The Vaio deal would also further Toshiba’s effort to hive off non-core assets, to pay for the fallout from an accounting scandal that’s led to the biggest crisis in its 140-year history. As for Fujitsu, it saw shipments of its PCs and tablets peak in 2007 as the company shifted away from chips and hardware to software services.
“In the PC business, all options are on the table for restructuring and partnerships, but nothing has been decided at this moment,” Toshiba’s spokesman Hirokazu Tsukimoto said.
Nevertheless, Vaio is set to report its first monthly profit in March and Moue expects the company to be profitable in the year ending May 2017. JIP has slashed the workforce to 240 from about 1,000, slimmed its product line-up and focused on premium business users, he said.