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Wed, Mar 25, 2009 - Page 10 News List

Speculation that IBM may buy Sun opens doors: Dell

OPPORTUNITY IBM is reportedly in negotiations to acquire Sun, which is creating a window for rivals to woo customer accounts, Dell’s CEO said

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Dell Inc, the world’s No. 2 maker of personal computers, said speculation over IBM Corp’s possible purchase of Sun Microsystems Inc creates opportunities for customer gains.

“Just the rumor of IBM potentially purchasing Sun creates an enormous opportunity, because all of the Sun accounts are very concerned about what will happen” to its proprietary products for server computers, Dell chief executive officer Michael Dell said at a briefing in Tokyo yesterday.

The Round Rock, Texas-based PC maker is “actively working with large numbers of Sun customers to move those from Sun’s Solaris, SPARC platforms to x86 Linux platform,” where Dell has strong market share, he said.

The executive declined to elaborate when asked whether there was an increase in companies switching specifically to Dell because of the speculation about Sun.

IBM, the world’s biggest computer services provider, is in negotiations to buy Santa Clara, California-based Sun, two people familiar with the matter said this month.

IBM would pay about US$10 a share, more than twice Sun’s March 17 closing price, people familiar with the talks said, giving the Armonk, New York-based services company almost half the global market for servers, computers that run networks and Web sites.

Dell declined to say whether the company was interested in buying Sun. Servers and networking equipment accounted for 10 percent of Dell’s US$13.4 billion in sales in the fiscal fourth quarter.

In related news, Taiwan’s Hon Hai Group (鴻海集團), parent of the world’s largest contract maker of handsets, denied a report in the Chinese-language Commercial Times that it received orders from Dell to produce smartphones.

Dell has placed the orders at Hon Hai and may introduce the smartphones as early as the first half, the paper reported yesterday, without saying where it got the information.

“This report is false,” Hon Hai spokesman Edmund Ding (丁祈安) said by telephone from Suzhou, China.

Michael Dell declined at a briefing in Tokyo to comment on the report.

Dell said in September that it may eventually sell smaller devices with features similar to smartphones.

Hon Hai Group unit Hon Hai Precision Industry Co (鴻海精密) is the world’s largest contract maker of electronics including mobile phones.

Foxconn International Holdings Ltd (富士康控股), also a group unit, assembles handsets for other companies.

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