Official: Toshiba pulls out of European consumer PC market
Also tears up its OEM deals with contractors in Far East
Exclusive Scandal-hit Toshiba is slashing jobs across Europe as it beats a retreat from the region’s consumer PC market.
Retailers are honouring existing orders for the first quarter of this year but are not placing any further ones, sources told us. Staff have been notified of the planned redundancies and a number put at risk.
“We are working with retailers on current inventory,” a spokeswoman at Tosh confirmed.
The company will still sell retail PCs in the US and Japan, but more locally, it will push notebooks and tablets to businesses, where it expects more stable demand.
According to Canalys, Toshiba sold 2.8 million notebooks in EMEA during 2015, a 38 per cent decline on the prior year, giving it 3.5 per cent share of a market that declined 16 per cent to 78 million units.
Senior analyst Tim Coulling told us the move from the Japanese PC maker was a “long time coming” and he reckoned there is relatively more money to be made in B2B PCs, what with accessories and services used to reinforce profits.
Toshiba started scaling back country operations in Europe back in 2014 with the closure of offices in Belgium, Switzerland and Italy. The org chart was also overhauled - it cut country managers - in moves that clearly didn’t work out.
The spokeswoman refused to reveal the number of redundancies involved, which are also believed to include some B2B staff, but she admitted that as a result of the consolidating portfolio, it is changing… "the structure of our business”.
“I can’t go into numbers; this is all at the proposal stage,” she said. Toshiba confirmed that Euro consumer PC boss Sandor van de Ham remains employed by the business but with the changes, his role will be made redundant. It is not clear if he will be relocated elsewhere in the group.
Sources claimed the UK retail team will have all split by June.
Eric Cariou, who ran B2B sales in Europe, split with the organisation in December and was replaced by Maki Yamashita, the spokeswoman confirmed. In another more high profile departure, Atsutoshi Nishida, the head of the global PC unit since 1995, has left.
Nishida is one of the five former Toshiba execs being sued over accounting irregularities that caused significant write-downs, after profits were overstated for nearly seven years to 2015.
“Toshiba doesn’t have any senior executive DNA for PCs left in the business,” one PC sector veteran told us.
Signalling the shift in its business, Toshiba has torn up its OEM deals with contract manufacturers in the Far East that built Satellite and Satellite Pro notebooks. Instead it will build Satellite Pro, Tecra and Portege devices at its own factory in Hang Zhou, Toshiba confirmed.
The problem with its plan for Europe, sources claimed, is that for the past two years Toshiba has tasked its local sales people with building sales to SMEs - the focus from now on will be mid-market corporate punters.
Rivals are establishing Toshiba attack plans both for the B2B market in Europe and the B2C sector in the US and Japan, and believe the company will show vulnerability very quickly.
PC sales are forecast to decline again this year, bean counters at Gartner said in January, so life isn’t going to get instantly easier for any vendor any time soon. Only this week HP Inc outlined a set of declining figures in its first quarter of fiscal ’16.
Michael Dell last year predicted that his company, along with HP and Lenovo would own 80 per cent of PC sales by 2022. It might not take that long.
Of course Toshiba might find comfort in the arms of others, and there are suggestions it might club together with Fujitsu and the private equity behind VAIO to form a venture in Japan. ®