HP-Compaq merger brings competitor opportunities

With Hewlett-Packard and Compaq focused on merging, the field has been left clear for rivals to start poaching customers, a...

With Hewlett-Packard and Compaq focused on merging, the field has been left clear for rivals to start poaching customers, a competitor has claimed.

Fujitsu Siemens, itself the result of the merger two years ago of Siemens AG's Computer Systems and Fujitsu Computers Europe, said the takeover of Compaq by HP could backfire on both companies.

"We don't see competition becoming stronger in the short term. In the post-merger phase they [HP and Compaq] will be quite heavily internally oriented, which offers opportunity for the competition," said Barbara Schädler, head of corporate communications for Fujitsu Siemens.

The takeover surprised Fujitsu Siemens, despite the fact that rumours had been circulating for some time, according to Schädler, who called the news "exciting for the whole market".

Schädler felt the merger would bring uncertainty to HP and Compaq customers, saying: "Nobody knows what the impact will be on the product portfolios. What is the added value of the merger? Both companies are very hardware-oriented, there is a lot of overlap in the products."

For users, the merger could mean a strengthened product range, but it raises the fear that PC prices might become less competitive.

"The product offering will be as wide. The quality might even be enhanced, having the best of both," said Alex Obolensky, a spokeswoman for PeoplePC, a customer of HP and Compaq which runs employee PC programs for companies in Europe and the US.

Obolensky said his company typically sent out requests for price quotes to Compaq, HP and IBM, but suggested: "It is not inconceivable that we will be asking for quotes from other parties if the merger produces non-competitive pricing."

HP and Compaq did not specify what would happen with overlapping product lines, such as PCs and servers, in their announcement of the merger.

Fujitsu Siemens is the fourth-largest PC-vendor based on shipments in Europe, Middle East and Africa, according to the research firm International Data Corporation. Compaq the heads the table, followed by Dell and HP.

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