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September 11, 1995

SIEMENS NIXDORF – “ESCOM TALE NOT TRUE” – TO GO RETAIL

By CBR Staff Writer

Having traditionally sold personal computers to large corporates, Siemens Nixdorf Informationssysteme AG has decided to focus on consumer personal computer sales by selling its new Scenic range – which starts at ú1,800 – via indirect retail sales channels. It hopes to derive 25% of personal computer sales in the UK through value-added resellers. The company has already assigned two distributors in the UK, one of which is Logitek Plc, and will announce a third in October. In Germany, the company has set up a consumer electronics division with the task of selling the new Scenic range. However a similar division is not planned for the UK. Instead, it will sell into Siemens’ UK customer base, and use the parent company’s experience at selling consumer electronics. It said it will not use Escom’s shops in the UK, and further revealed that contrary to popular belief, it does not manufacture any personal computers or notebooks for Escom. The widespread misconception was spread by Escom to enhance its own credibility, the company alleged. However, Siemens Nixdorf is looking at selling the consumer line in other retail outlets. Escom had said 80% to 90% of its computers were manufactured by Siemens (CI No 2,650) – and even in the Escom shop in Brixton, if you ask who makes the machines, the assistants will unblinkingly reply Siemens Nixdorf. More recently it said that all it and Siemens Nixdorf – which owns 10% of the Heppenheimer – do together is combine their buying power of component parts in the Far East. Siemens Nixdorf set up a French manufacturing plant in Haubourdin, near Lille to increase its brand credibility. The plant produces roughly 25,000 business personal computers and servers each year. Siemens currently has 2% of the market in France and Bull 7%, although Compaq Computer Corp and IBM Corp dominate. They hope this will push their market share up in France. The company admitted that the US us a vital market to penetrate, and that it is a hard but necessary nut to crack to extend its global reach as a personal computer manufacturer. But a move into the US through a partnership was at least a year away, the company said. For the moment it plans to concentrate on Europe and Asia. The company has high hopes of its personal computer division, which reached profitability in January this year. In fact the future of Siemens Nixdorf generally appears to be brightening. It is again forecasting break even this year (closer to the end of the year than it has made such forecasts that proved vain before) and move into profit next fiscal, which starts on October 1.

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