Will Commoditization of PC and Phones hurt their innovation ??? – Fujitsu is splitting its PC and mobile divisions into new companies

Fujitsu is splitting its PC and mobile divisions into new companies in an attempt to create more efficient businesses that can better compete in their increasingly competitive markets. It shows the increasing sign of Phone and PC segment getting commoditized.

Fujitsu

“With the ongoing commoditization of ubiquitous products, mainly of PCs and smartphones, it has become increasingly difficult to achieve differentiation, and competition with emerging global vendors has intensified,” Fujitsu writes, explaining the spinoffs. Spinning these businesses out into their own separate entities is an easy way to get rid of a painful, loss-making division without admitting that’s what you’re doing.

Recently Sony did the same for Vaio personal computers. Toshiba is also seriously looking for the Option. Earlier IBM also sold its PC and Laptop business to Chinese PC Maker Lenovo.

Every new technology must pass on through Commoditization. But If you ask whether it hurts the further innovation possible in that field ??? Yes. The PC and Phone Industry passes the same phase now.

Innovation and new product development is always associated a big price tag for Big OEM Manufactures. By positioning new inventions as premium products, they can earn the innovation cost.

But when the product goes in to Commodity, the margin becomes wafer thin. This poses serious challenges for allocating fund for further innovation in the product. We can witness this in PC Industry, where it takes long time to see new innovations in Laptops and Desktop Computers. You can choose the same specification from different vendors with no big functional and designing change.

This also throws up new challenges and opportunity for new kind of products. Disruptors can take this product and modify its utility to entirely a new dimension. It will create a whole new product space in the market. Tablets can be a good example when both PC and smartphone gives way for a product which parters both functionalities.

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