Re Toshiba -- exiting desktop PC biz.
Anyone know whose drives they were using? This does not help in firming up prices -- they may be dumping inventory in the near term. Longer term, it seem a non-event.
Tuesday November 25, 8:09 pm Eastern Time
Company Press Release
Toshiba Bids Farewell to Retail Desktop-PC Market, Reports CMP's Computer Retail Week
MANHASSET, N.Y.--(BUSINESS WIRE)--Nov. 25, 1997--Toshiba America yesterday disclosed to CMP's Computer Retail Week that it will
discontinue marketing the year-old Infinia consumer-desktop brand when it sells out remaining inventory.
An executive cited a ''dramatically changed'' market, especially with the predominance of sub-$1,000 PCs, in explaining the move. Market analysts said
several critical miscalculations and a disturbing drop in market share for Toshiba's core notebook-computer products made Infinia's demise inevitable. The
company intends to remain in the desktop market, but only on the commercial enterprise side.
''We found that basically the market has changed dramatically over the last year,'' Ron Crocco, the former Compaq retail executive recently named Toshiba's
Vice President of Sales, told the publication. ''Sales of sub-$1,000 PC sales grew by leaps and bounds and caused us to look at what we are going to do in
this space.''
Toshiba's sleek, feature-packed Infinias nested at the top end of the market, which has been battered by sub-$1,000 systems. But the popularity of low-cost
systems was only part of the problem, the newspaper reported today in its online edition (http://www.crw.com). A pair of early, high-tech bets failed and hurt
the company at a critical point in its growth.
The first was a decision to follow Intel's (NASDAQ:INTC - news) 1996 road map that moved the introduction of MMX from October 1996 to January '97,
causing consumers to delay their purchases last year. That left Toshiba with inventory it could not sell, sources reported at the time. The company was forced
to make major price concessions after the launch of its non-Pentium MMX products. Price-protection costs were said to have led Toshiba to reconsider its
position in the market as early as last spring.
Another misstep was the large bet Toshiba placed on DVD, a technology that it codeveloped and saw as a differentiating technology for its home systems. But
continual delays, lack of software, contractual issues and confusion in that market have made DVD the non-event of the year in PC technology, and the first
half of 1998 does not look much better.
While juggling the impact of those issues, Toshiba missed the ball on others: It wound up late to market this past spring with MMX technology and was slow in
introducing others.
Oddly, Toshiba was unable to leverage its strength in the notebook-computer market to help its consumer desktop sales. ''Their products were good, but they
were only at the high end,'' said one retail store manager. ''They did not have anything in the mid to low portion of the market.''
The company decided that if it was going to invest in developing differentiated systems, it made more sense to focus on the commercial side with its Equium
line rather than in its Infinia products.
''Where the price points are today, the opportunity is to sell in the enterprise,'' Crocco told the publication. ''All efforts in retail will be in notebooks.''
The company will continue selling the remaining Infinias until the end of the year and into early 1998, and then will cease selling desktop systems at retail,
Crocco said.
The company does offer its Equium line through the outbound sales force of the office superstores such as CompUSA but has not decided if it will allow them
to sell on the store floor, Crocco said.
CMP's Computer Retail Week is one of the leading newspapers for technology retailers. Each week, it provides critical information about new alliances,
technologies and products for a wide audience of computer hardware and software retailers, mass merchants, software specialty stores and other Channel
members. For the past seven years, Computer Retail Week has delivered breaking news weekly, and those stories are posted on the Computer Retail Week
home page at crw.com.
CMP Media Inc. (Nasdaq: CMPX - news) is a leading print and online publisher of newspapers and magazines about technology and an innovator in
technology-related Internet products and services. CMP's offerings serve the broad technology spectrum in key high-tech markets worldwide: those who build
technology, those who sell it, and those who use it. The company's publication titles, which include EE Times, InformationWeek, Computer Reseller News,
Computer Retail Week and Windows Magazine, along with products and services created exclusively for the Internet, can be found on CMPnet at
cmpnet.com.
NOTE: All of CMP's press releases are available on the Web at cmp.com. |
