Report: Fujitsu, IBM Hold Talks
Oct. 17, 2001
TOKYO (AP) _ Japan's Fujitsu Ltd. and IBM are in talks to jointly develop software for corporate clients to cut costs as sagging demand for computers and other hardware hurts earnings, a newspaper reported Thursday.
Louis V. Gerstner Jr., IBM chairman and chief executive officer, and Toshiba President Naoyuki Akikusa agreed to the talks at a meeting in Tokyo late last month, the Nihon Keizai newspaper said, without citing a source.
A final agreement is expected by the end of this year, the financial daily said.
IBM and Fujitsu, among the world's largest computer makers, would achieve combined savings of more than 30 billion yen ($246.7 million) by cooperating on development of database and other software for corporate customers, the paper said.
IBM would also provide Fujitsu with technology for personal computer servers while Fujitsu is considering supplying IBM with networking devices, the Nikkei said.
The rivals have been forced to join forces as earnings suffer because the worldwide slump in hardware such as computers and semiconductors.
Fujitsu lost 55.4 billion yen ($460 million) in the first quarter that ended in June and forecasts losses for this fiscal year. IBM on Tuesday reported a 19 percent on-year drop in its third quarter net income to $1.6 billion.
Fujitsu announced in August that it would slash 16,400 jobs, or 9 percent of its work force, in a bid to stem red ink amid the worldwide electronics slump.