Toshiba, Fujitsu, Vaio Set to Scrap PC Merger Plans

The proposed 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.

According to the Wall Street Journal report 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. Also, the Journal points out that the combined 2015 market share of all three companies which is less than 6.5 %  which falls below Apple’s 7.1 % of worldwide market share.

If the talks falls through then it possible for the companies to go to their separate ways which is an increasingly risky proposition as the PC industry continues its downward slide.

Also, JIP CEO Hidemi Moue publicly talked up the three-way deal as late as February. He also said, “The PC market is shrinking, which means there are merits in working together to make the most of research, marketing channels, production volumes” Moue told Bloomberg.

Concurrently, Mouse spoke about the possibility of moving beyond PSs into Smartphones and forecasted that the deal would be achieved by the end of March. With Vaio combine forces, unless the two can find a particular niche to exploit. For instance, Panasonic has fallen by the wayside as per overall PC unit sales are concerned, but the company has refocused itself on its Toughbook ruggedized PCs.

Yet, the 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 business with each receiving a relatively equal stake in equity.

Verdict: However, the most important number in all of this isn’t the relative market share of HP, Dell, Toshiba or any of the PC player. It’s the “others” category, the catchall for the smaller players that don’t make the top five. In second quarter of 2014, the “others” category sold 26.6 million PCs, worth 35.0 percent of the market under double that of the leading vendor, Lenovo. Now it’s 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 may fade away.