Tesco set to offer Fujitsu bargains

Tesco is marching farther into the hardware market, as it has emerged that Fujitsu PCs will appear on the Web site. This followed the announcement that the in-store sales pilot between the two companies was due to ship to 60 stores.

Fujitsu is aggressively encouraging Tesco to expand its PC sales operation in an effort to achieve the volume sales required to make the operation viable.

Frank O'Brien, sales director at Fujitsu, revealed: 'We are shipping to 60 stores. We're already in 12 at the moment. The Siemens Nixdorf stores have run out and were unable to re-stock - so we took them over as well.'

He added that other plans include offering a PC financing deal to Tesco customers, selling PCs over Tesco's Website and offering notebooks. The aim of volume sales is to cut PC prices further: 'I'd say the holy grail price is #499 including VAT for a P350.'

Russell King, managing director of Fujitsu reseller Nexnix, commented: 'My only concern would be if Fujitsu dropped the price to a point where my customers believed they could get a better deal from Tesco. I offer a support infrastructure, but if my customers start believing that I am making a bigger wedge than I am, that could be a problem.'

Jeremy Davies, analyst at Context, commented: 'It's mind boggling that Siemens has not kept up - it is throwing the business away - and that is potentially worth millions of pounds. Tesco must love it - spot deals with no commitment. It doesn't have to shell out for training staff or support and it gets a comparatively huge margin. You can't make #100 on a can of beans.'

Tesco refused to comment. Andrew Humphreys, manager of business development of PCs at Siemens - who heads the Tesco pilot operation - was also unavailable for comment as he had been called to Germany to discuss the situation.