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To PC or not to PC: Olivetti considers its options

To PC or not to PC: Olivetti considers its options

With hardware manufacturer Olivetti facing pressure from investors - the company's shares are at an all-time low - industry watchers are debating the embattled company's next move. Will it sell its PC business, as has been widely speculated in the world press, or will it form a strategic partnership with another large multinational?

According to Olivetti Australia's marketing manager Sue Gleave, Olivetti is likely to pursue the latter, although she declines to name potential partners. "At the beginning of 1996 Olivetti split into five separate companies. I don't think it is likely that the company will sell the PC division for the simple fact that the other four divisions rely strongly upon it - there are a lot of synergies there," Gleave said.

"This is a personal opinion, but I think it is more likely we will form an alliance with another company in order to bring the PC company into profitability," Gleave said. "Right now who that company will be is really just at the rumour stage, but what I think will happen is that Olivetti will announce the details of such a partnership sometime in the fairly near future. There's a lot of pressure being exerted by shareholders, and that will drive the process."

Charles Smulders, an analyst with Dataquest Europe, believes that were Olivetti to attempt to get out of the PC business altogether, it would "be prohibitively expensive and would wipe off over 10 per cent of Olivetti's revenue overnight", he said. "Selling the business in its current state [losses of more than $US11 million in the second quarter] is probably not a viable option as finding [a buyer] would be difficult."


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