VAIO, Toshiba, and Fujitsu will reportedly merge in the face of sinking PC sales

By Ryan Whitwam

As sales and profit margins on traditional PCs continue to shrink, so to do the number of PC makers. Some go out of business, only to have their carcasses picked over by competitors, but others see the writing on the wall and join forces before it’s too late. Such is reportedly the case for VAIO, Toshiba, and Fujitsu. Bloomberg reports that these three brands will merge, creating one of the largest PC makers in the world.

This news comes by way of Hidemi Moue CEO of Japan Industrial Partners, which owns Vaio. Moue has confirmed that the deal is in the works, and could be made official by the end of March, assuming the parties can agree on terms. It’s not clear what brand the three would sell PCs under.

None of these firms is doing swimmingly on its own, although VAIO has barely had a chance to prove itself. This company was spun off from Sony in 2014, but that move hasn’t improved the fortunes for the Vaio line of computers. Toshiba and Fujitsu are involved in more businesses, and thus have weathered the storm better. Still, things could be going better. Toshiba had to cut several thousand jobs at the end of last year, but denied it was thinking about getting out of the PC market. Fujitsu has also been on the decline, and it has very limited market penetration outside of Asia.

Despite all three companies being based in Japan, they can’t match the market share of NEC Lenovo. That is, of course, a partnership between the world’s leading PC maker Lenovo and Japanese firm NEC. NEC Lenovo controls about 29% of PC shipments in Japan, with Toshiba at 12% and Fujitsu at 17%. Vaio doesn’t release numbers as it isn’t publicly held. Combined, they would be able to rival NEC Lenovo in Japan.

As for outside of Japan, investors are skeptical the alliance will do much good. Lenovo, HP, and even a resurgent (and privately held) Dell are out in the lead. The stock prices of Fujitsu and Toshiba did tick upward on the news, though.

This won’t be the last alliance between PC makers as consumers increasingly rely upon smartphones and tablets for their computing needs. A modern phablet can be a surprisingly capable device, and people are less dependent on desktop Windows software for getting things done. Not to mention, smartphones are increasingly cheap and can be replaced frequently. A computer, on the other hand, can go longer between upgrades.

Joining forces might help Toshiba, Vaio, and Fujitsu cope with a shrinking market, but it won’t reverse the trends.