Mitsubishi Electric Corp. plans to farm out all production of its personal computer servers, company officials said Tuesday.

Industry sources said Mitsubishi Electric will probably go with Hewlett-Packard Co. of the United States or NEC Corp., which provides Mitsubishi with PCs.

The plan is part of Mitsubishi Electric’s efforts to strengthen its service businesses in exchange for relinquishing hardware production, the officials said.

The move is seen as a response to fierce competition in the server industry that resulted from a price war waged by U.S. players, including Hewlett-Packard and Dell Computer Corp.

Mitsubishi Electric shipped some 13,500 servers in the 2001 business year, more than half of which were PC servers.

Farming out production of PC servers will leave the firm with producing business servers for small and midsize companies, the officials said.

Mitsubishi Electric has already farmed out production of UNIX-based servers to Hewlett-Packard.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.