Escom Faces Tough Competition in Europe
10-Mar-96 - According to a recent article in Computerworld, things are not so rosy for Germany's Escom AG, parent company of Amiga Technologies and one of Europe's largest PC box suppliers. The problem is related to increased competition from outside Europe for the hearts and minds of European PC buyers, driving profit margins down.
In particular, Taiwan's Acer Incorporated is making big strides for a share of the PC market in Europe. Acer chairman Stan Shih said, "This is the year of Europe for Acer." Acer is spending $40 million on a new plant in France and also stepping up its marketing efforts, concentrating on the consumer business.
On the other hand, Escom is projecting big losses on its operations--perhaps even triple what was originally announced--in part due to sales coming in nearly a billion marks lower than expected. Escom is also looking for $69 million in loans to make it through these rough times. According to Computerworld, Escom may have overextended itself with the acquisition of British retail chain Rumbelows and has yet to see much income from Amiga Technologies and its new Commodore line of PCs because of component shortages and delays in production. Price wars on PCs have further hampered efforts at breaking even.
Copyright, 1996, CUCUG
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