Speculation mounts over FSC's future

Reports claim engineering giant Siemens might want out of 50/50 joint venture

The future of PC vendor Fujitsu Siemens Computers (FSC) may be in jeopardy as recent reports claim the German engineering colossus is considering backing out of the joint venture.

Reports surfaced last week suggesting that Fujitsu and Siemens were locked in talks to decide on the future of the company. The current joint venture contract expires next year and will be automatically extended for a further five years if neither party backs out.

Siemens has endured some testing times of late and recently announced plans to cut up 17,000 jobs in a bid to save more than €1bn. Speculation is mounting that it might be preparing to pull the plug on the joint venture and, if it does walk away, Fujitsu will have first refusal to buy it out. If that does not happen, Fujitsu could be left to look for a new joint venture partner or a company prepared to buy FSC outright.

FSC was founded in 1999 with ambitious plans to become one of Europe and the world's top PC vendors. But sales figures and revenues have taken a hit of late, and in FY2007 turnover was down 4.9 per cent to €6.6bn, (£5.24bn).

During Q1 2008, its UK shipments fell by 12.9 per cent year-on-year to leave it fifth in the UK PC market with a 5.3 per cent share. Globally, FSC's market share is well under five per cent and the vendor has fallen behind top five HP, Dell, Acer, Lenovo and Toshiba.