Philips NV’s problematic information systems business accounted for some $1,100m of the company’s $30,000m turnover for 1989. The computer side of the business is split into five product areas – personal computers, optical storage systems, minicomputer systems, Unix systems and the strongest area of the computer side globally, systems and terminals for banks and building societies. Sales to the financial sector account for 38% of all information system sales, the bulk of this is taken up by sales of financial terminals – so that that will clearly be a key inducement for any eventual partner, and would offer ICL an very attractive extra string to its bow. Sales to small businesses account for 34% of all information system sales. In product terms, of the information system sales in Europe, personal computers represent 23%, minicomputer systems 38% many of these are used as financial terminal controllers and network nodes; Megadoc, the optical filing system, accounts for 6%. No figures available for Unix systems or products for the financial sector. But in the UK, sales of Unix systems account for almost 100% of all information system sales. Manufacturing is split between West Germany, the Netherlands and Canada. Minicomputers and Unix systems are made in hideously expensive West Germany, in Holland there is a systems software development centre, and personal computers are made in Canada – Philips entered the dedicated word processor market with the acquisition of Montreal-based Micom Ltd back in 1982. Dedicated word processors gave way to personal computers and Philips had to follow, by it has had an unhappy time in personal computers, typically coming out with attractive-looking, well engineered machines, originally made in high-cost Austria, that were simply too expensive. Despite the pain in its computer business, Philips was still expanding that side of its business as recently as last year, acquiring Headstart Technologies in an effort to become a major player in the US market. There would be clear benefits to ICL in taking control of the Philips business, with little overlap after manufacturing is rationalised, and the UK company must be interested – it looked closely at Nixdorf Computer AG before Siemens AG exercised force majeure with a German solution, but it is not certain that the elder statesman in Eindhoven would stomach a sufficiently radical restructuring.
