TOKYO -- A plan to merge the personal computer businesses of Toshiba, Fujitsu and Sony spinoff Vaio has been scrapped. The trio failed to come up with a growth plan for after the integration, despite hopes that with over 30% of the Japanese market between them, a single entity would be in a good position to compete overseas.
As the global PC market continues to shrink, the once-mighty Japanese electronics giants continue to struggle.
"After all that talking, we still couldn't reach an agreement," said one frustrated negotiator. The three unveiled the integration plan in December last year, aiming to launch a merged company as early as April. "It can't be helped. We are back to square one," the negotiator said.
PCs, composed of some basic software and standardized components, have become commodities. There does not appear to be much room for creativity in terms of clever new functions. "It is an industry where you compete to procure parts as cheaply as possible and assemble them at the lowest cost," said one industry insider. Globally, China's Lenovo Group and two U.S. companies, HP Inc. and Dell, together control over half the market.
One of the aims of the three-way merger among the Japanese PC makers was to give them the scale needed to battle those rivals.
Bigger problems
Last October Fujitsu revealed its midterm business plan, saying it would focus on information technology services. In February, it spun off its PC operation, unloading a business which, including mobile phones, was expected to log a 10 billion yen ($92.6 million) operating loss in the fiscal year that ended in March.