Fujitsu Siemens Computers has posted its first-ever profit and is
being viewed by analysts to be in a strong position to benefit from
consolidation in the computer market.
The company, founded in October 1999 by Siemens in Munich and
Fujitsu in Tokyo, reported a better-than-expected pretax profit of
€29m, (£18m) for the year ending March 31, compared to a €71m
(£44m) loss the year before.
Revenue dipped to €5.4bn from €5.9bn in the previous year. Adrian
von Hammerstein, who took over as president and chief executive of
Fujitsu Siemens Computers at the end of last year, attributed the
drop in sales to the global economic slowdown, but said he expects
sales to increase 5% in the current business year and for the
company to post a profit. The vendor, he added, is pinning its
hopes on new mobile products and business-critical systems, such as
servers and storage devices.
Fujitsu Siemens Computers' notebook sales were up 27% in the first
quarter of 2002, compared to the same period a year ago. That
compares with the industry average of 1.49%, according to the
company. Von Hammerstein aims to have notebooks and mobile devices
account for 16% of total sales by the end of the current fiscal
year, up from about 10% currently.
Analysts expect the company, based in Maarssen, The Netherlands, to
seize channel sales opportunities in Europe arising from the merger
of Compaq Computer and Hewlett-Packard.
"Fujistu Siemens is the only major vendor actively courting
European distributors to win some of the volume business expected
to be up for grabs now that HP and Compaq have finalised their
deal," said Brian Gammage, a principal analyst with Dataquest, a
unit of Gartner.
"The company hired Bernd Bischof from HP, which has had the leading
channel program for volume products in Europe," Gammage said.
"Bischof has been instrumental in introducing a channel strategy
for volume products at Fujitsu Siemens. In addition, of the 400
people hired over the past year, half of them are targeting
distributor accounts. No other major vendor has put money on the
table and invested in people to do that."
Still, Fujitsu Siemens has been known to give a fuzzy picture of
where the company is headed. Announcements have been
"contradictory" at times, Gammage said. Although Fujitsu Siemens
has said it intends to shift revenue away from volume products,
such as PCs, to higher-margin enterprise products, including
mainframes, servers and storage devices, "the vendor has also said
it aims to increase sales to small and medium-sized enterprises,
which buy volume products."
The strategy for low-margin consumer products, however, is fairly
clear. Von Hammerstein said earlier this year at the CeBIT trade
show in Hanover, Germany, that sales of PCs and notebooks to
private users would drop to 56% in the previous business year from
60% the year before. He intends to lower that to less than 50%in
the current business year.
As a result of fewer consumer sales and a freeze on spending by
large companies, Fujitsu Siemens saw its share of the German
computer market drop to 40% at the start of this year from 55% in
2000, according to Dataquest.