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Fujitsu and Siemens jump into joint venture

Fujitsu and Siemens jump into joint venture

Fujitsu and Siemens last week announced an agreement to merge most of their European computer operations in a 50-50 joint venture.

Fujitsu Siemens Computers, as the joint venture will be called, will develop, manufacture and market notebooks, desktops, PC servers, Unix servers and mainframes, the vendors said in a statement. The venture merges Fujitsu's Computers Europe and Siemens Computer Systems division, which includes development, manufacturing and marketing. The vendors expect to soon sign a definitive agreement detailing the deal, based on last week's memorandum of understanding.

Fujitsu and Siemens will also cooperate on research and distribution efforts worldwide. Few other details on cooperation outside of Europe were released.

Combining their efforts will give Fujitsu and Siemens the ability to offer customers more competitive products, faster time-to-market and better price/performance, officials said.

The agreement, rumored for months, would appear to end Siemens' search for a partner in the computer industry. The German organisation has been openly searching for such a partner to obtain the critical mass it needs in the computer industry since the collapse of its proposed venture last year between Siemens Nixdorf Informationssysteme AG (SNI), its former computer subsidiary, which has now been merged back into Siemens -- and Taiwanese PC vendor Acer.

Fujitsu is Japan's number two PC seller, according to analysts. The vendor in recent years has focused on expanding its PC operations outside of Japan. It sells PCs in the US through a subsidiary.

For at least one analyst, however, the deal still doesn't bring either Fujitsu or Siemens the necessary economies of scale which the vendors need to compete in global computer markets. Both still need to extend their reach in the US market, said Howard Seabrook, vice president with Gartner Group.

"So much of their combined strengths are in Europe and Asia," and not in the US, said Seabrook. To increase market share in the US, they will still have to partner with a medium-sized US hardware vendor or expand their own US operations.

"This shows how difficult it is for medium-sized hardware vendors to survive," Seabrook said.

The new venture will be the third-largest European computer hardware organisation based on revenue with expected annual revenues in 2000 of more than 7.6 billion euros. ($US7.9 billion).


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