Lenovo, Fujitsu eye global cooperation in PC business

The two hi-tech companies say they are in talks with the Development Bank of Japan for ‘financial and strategic support’

PUBLISHED : Thursday, 27 October, 2016, 5:57pm
UPDATED : Thursday, 27 October, 2016, 10:57pm

Lenovo Group and Fujitsu are looking into a strategic global cooperation in the personal computer market, following widespread speculation earlier this month that the Japanese company would divest its personal computer business to the Chinese hi-tech giant.

In a joint statement released on Thursday, Tokyo-based Fujitsu and Lenovo said they are exploring a collaboration in the research, development, design and manufacture of personal computers for the global market.

The two companies added that they were in talks with the Development Bank of Japan to provide “financial and strategic support”.

Details of the proposed cooperation are still under discussion, they said.

Earlier this month, speculation was rife that Fujitsu was contemplating divesting its personal computer business to Lenovo.

In February, Fujitsu spun off its personal computer and smartphone businesses into two separate companies, Fujitsu Client Computing and Fujitsu Connected Technologies.

“Through the cooperation, the two companies aim to create a successful model that leverages Fujitsu’s global sales, customer support, research and development, and manufacturing capabilities together with Lenovo’s operational excellence,” the joint statement said.

Another option involves Lenovo taking a majority stake in Fujitsu’s personal computer subsidiary
Alberto Moel, Bernstein Research senior analyst

Fujitsu is Japan’s leading information and communications technology company, with revenue of about US$41 billion in the 12 months to March 31.

Bernstein Research senior analyst Alberto Moel said earlier this month than one acquisition scenario may involve Fujitsu transferring its personal computer design, development and manufacturing operations to a new Lenovo-led joint venture.

“Another option involves Lenovo taking a majority stake in Fujitsu’s personal computer subsidiary,” Moel said.

With operations in more than 160 countries, Lenovo has struggled in the past few quarters as a result of a tepid global personal computer market and increased competition in smartphones, as well as falling commodity prices and weak international currencies.

However, Lenovo remained the global personal computer industry leader in the quarter to September, with shipments of 14.51 million units and a 21.3 per cent market share, according to research firm IDC.