Check this "Nikkei Net" article on Fujitsu related to their Internet positioning. There may be a parallel to IBMs ecommerce repositioning/focus during the mid 90s.
I have considered SONY for a while now ...
Regards,
---
Issued: December 6 ,1999
Fujitsu hitches fate to the Internet
Logging on Company's stock soars as it tries to re-invent itself into a cross between IBM and AOL
KAZUNARI YOKOTA
Staff writer
Naoyuki Akikusa, president of Fujitsu Ltd., cuts an imposing figure. He is 182cm tall, just shy of 6 feet, and tends to be a cool customer. "I don't panic, even if others show surprise," he said.
That is one of the reasons Akikusa was selected for the company's top post, said former Fujitsu President Tadashi Sekizawa. The directors were looking for someone who could show grace under pressure while reshaping the giant computer manufacturer into a force to be reckoned with on the Internet.
Akikusa, the first Fujitsu president to begin his career as a systems engineer, sees the company becoming a cross between International Business Machines Corp. and America Online Inc. Investors seem to like what they hear: Fujitsu's stock price has more than doubled to 3,540 yen ($35) as of Dec. 3 from 1,505 yen at the end of 1998. The stock's increase is way ahead of the 32.6% increase in the Nikkei Stock Average over the course of the year.
"The Internet will be an integral part of society, just like electricity and water," Akikusa said. "It will take off in Japan soon and rapidly become part of our daily lives. Everything will be on the Internet."
Fujitsu is aiming to create a virtual city on the World Wide Web by 2003 that would be home to more than 10 million computer users through the company's Internet service provider, @nifty. The provider, which is managed by wholly owned subsidiary Nifty Corp., currently has 3.5 million users, tops in Japan.
Fujitsu has begun forming alliances with companies to provide Internet content and expand electronic-commerce services via @nifty. In July, the company tied up with Sakura Bank to form an Internet bank that will open next year and with Nikko Securities Co. to form an online brokerage that is to start operating in January. Fujitsu officials say they are also looking into online alliances in insurance, agriculture, communications, energy, distribution, transportation and other sectors.
Many analysts think Fujitsu is on the right track.
"The biggest difference between AOL and Fujitsu is that Fujitsu has a strong solutions business from mainframes to personal computers," said Mami Indo, senior analyst at Daiwa Institute of Research. "Fujitsu does not have to earn from @nifty. With @nifty as the show window, it can pull in customers for its computers."
Yoshiharu Izumi, a senior analyst at Warburg Dillon Read in Tokyo, said: "Fujitsu is trying to serve all customers from business to consumers. Both markets are expanding rapidly, so it can expect expansion of business from both sides."
The company's strategy for expanding business on the Web became clear this March, when it purchased Nissho Iwai Corp.'s 50% stake in Nifty for 26 billion yen. Nifty, which operated Nifty Serve, the oldest surviving Japanese personal-computer communications service, was established in 1986 as a joint venture between Fujitsu and Nissho Iwai, but the trading house was saddled with losses in the financial sector and sold its share to raise some quick cash.
Fujitsu combined Nifty Serve with its InfoWeb Internet service provider last November to form @nifty.
The provider is the centerpiece of Fujitsu's strategy, according to Nifty Managing Director Yuichi Kato. "We can offer 3.5 million users from the beginning. That is a great advantage," he said.
The second-largest Internet service provider in Japan is NEC Corp.'s Biglobe with 2.7 million users.
Tatsuzumi Furukawa, director and group president of Fujitsu's network service group, said he hopes "there will be competition inside @nifty" by having outlets for several companies in each sector.
Akikusa, who became president in June 1998, spent most of his career in the software and service section, a section that has only recently entered the company's mainstream. Akikusa was chosen just as the company was putting more emphasis on its solutions, or system-integration, business. In the first half of fiscal 1999, sales from the software and service business exceeded for the first time sales of data-processing equipment, which is made up mostly of computers. Software and service sales accounted for 38.6% of the company's total, just edging out the 36.8% share for data-processing equipment.
Fujitsu's move to focus more on the software and service sector came as the company faced increasing losses in its hardware business, especially in semiconductors. In 1998, the company decided to reduce output of dynamic random-access memory chips and formed an alliance with Toshiba Corp. to swap products. It also shut down a semiconductor factory in the U.K. in December 1998.
Akikusa says the company can't afford to dawdle. "The Internet business moves so fast. We have to start as soon as we have a good partner," he said. "Japan is said to be far behind the U.S. in the Internet business, but we have to strive to create our own original model."
He aims to post Internet-related sales of 1 trillion yen in 2003, about five times the current level.
"Fujitsu's strategy is to take the No.1 seat on the Internet (in Japan). With @nifty, it has an advantage," said Kazu Saito, senior analyst at MultiMedia Research Institute.
Not everyone is convinced that Fujitsu is on the right track, however. "The initial investment is large in this business. It is still unclear how Fujitsu will earn profit from its Internet business," said Tatsuya Mizuno, senior credit officer at Moody's Japan.
This June, Fujitsu set up several groups to provide network infrastructure for the solutions business. It also solidified its network groups on the hardware and software side to help streamline and quicken management decisions. Akikusa acknowledges that the race for predominance on the Web in Japan has just begun and that the company's path is still unforged. But the point, he says, is to move forward and build. "On the Internet, we have to be constructive, because we are creating the world."
|
