Proposed Toshiba, Fujitsu, Vaio PC merger is reportedly collapsing

[asdasdads Prince]

If the merger fails, how long can these smaller vendors hold on?

^{Toshiba's Satellite PC business will have to go it alone, it appears, as a proposed Vaio/Toshiba/Fujitsu merger apparently is falling apart.}

A three-way merger between Fujitsu, Toshiba, and Vaio Corp., seen as a way for these smaller PC players to take on larger rivals like HP Inc. and Dell, is apparently collapsing.

The Wall Street Journal reported Thursday that the talks between the three companies were breaking down, and that Japan Industrial Partners (JIP) Inc., which owns a controlling stake in Vaio, had already walked away. As the Journal points out, though, the combined 2015 market share of all three companies is less than 6.5 percent, which falls just below Apple’s 7.1 percent of worldwide market share.

If the talks fall through, it’s possible the companies would just go their separate ways, an increasingly risky proposition as the PC industry continues its downward slide. 

It’s worth noting that JIP CEO Hidemi Moue publicly talked up the three-way deal as late as February. “The PC market is shrinking, which means there are merits in working together to make the most of research, production volumes, and marketing channels,”Moue told Bloomberg.

At the time, Moue talked about the possibility of moving beyond PCs into smartphones, and predicted that a deal would be achieved by the end of March. With Vaio apparently out of the talks, it’s less likely that Toshiba and Fujitsu would combine forces, unless the two can find a particular niche to exploit. Panasonic, for example, has fallen by the wayside as far as overall PC unit sales are concerned, but the company has refocused itself on its Toughbook ruggedized PCs.

Discussions of a three-way merger began last fall, when Japan’s Nikkei financial paper reported that the three companies were thinking of combining their notebook businesses, with each receiving a relatively equal stake in equity. 

The story behind the story: The most important number in all of this isn’t the relative market share of HP, Dell, Toshiba, or any one PC player. It’s the “others” category, the catchall for the smaller players that don’t make the top five. As late as the second quarter of 2014, the “others” category sold 26.6 million PCs, worth 35.0 percent of the market—just under double that of the leading vendor, Lenovo. Now, that total is down to 21.8 million PCs, and 33.6 percent. If the PC market continues to shrink, chances are the big players will become bigger—and the smaller vendors? They could just fade away.