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Toshiba Confirms Massive Exit From Consumer PC Markets But Not OZ

Toshiba Confirms Massive Exit From Consumer PC Markets But Not OZ

Last night in Japan senior Toshiba management said that they were accelerating the restructuring of its PC business and that they would withdraw from 19 consumer markets around the world. 

Mark Whittard the CEO of Toshiba Australia has confirmed exclusively to ChannelNews that Australia and New Zealand will not be affected by the changes and that “It is business as usual”. 

Whittard said “The PC market is tough at the moment but we are staying in the consumer business”. 

Back in January ChannelNews tipped that changes were set to be made to the way that Toshiba operated their PC business, following a discussion at CES with senior Japanese Toshiba management, at the time we said that the Company was set to quit the consumer market in Australia. 

I was also told that the Company was considering a change of direction after racking up losses in the consumer PC business.

Ogilvy + Mather the PR Company for Toshiba demanded that the story be pulled down, they said that they were acting on the instructions of Toshiba Australia Managing Director Mark Whittard and that there was no truth “whatsoever” in the claims being made by ChannelNews. 

We chose not to pull the story down in in true to form fashion Ogilvy + Mather rolled out the predicable PR line “You will be banned if you don’t pull the story down”. 

What we did was publish a second story in which Rob Wilkinson General Manager of Consumer Electronics at Toshiba said that the Company has developed a new business model that will see them stay in the CE market. The model involves a pairing down of costs and resources in an effort to be more competitive in the retail marketplace.

Toshiba whose consumer PC business has been struggling for more than 24 months said it would reduce the size of its global workforce in the PC business by about 900 workers, which is 20% of its PC operations head count.

It will also cut fixed costs by more than Y20 billion versus the previous fiscal year ended in March and reduce the number of sales bases around the world to 13 in the current fiscal year from 32.

Back in January Toshiba executives didn’t specify which consumer markets it would withdraw from but ChannelNews was told that Australia was one of the markets under consideration. Whittard has categorically denied this. 

“The PC market is expected to see a continuing trend to modest growth rates, and these transformation measures are necessary to support the business in securing consistent profit,” Toshiba said in a statement.

Toshiba would not say which consumer models will survive the downsizing. Toshiba models include the Portege, Kira and Satellite brands, including the first laptop with a 4K display which got bad reviews due to poor battery life. 
Toshiba’s Satellite notebook line is also set to go. The Japanese Company will put more emphasis on workstations and tablets that cater to businesses, and aims to venture into the Internet of Things (IoT) category along with several other PC Companies. 
 Toshiba said that they see the consumer market as being “volatile and over-dependent on sales scale and volume.” 

Back in September 2013 ChannelNews exclusively tipped that Toshiba who was also struggling in the TV market were considering an exit from the Australian market, at the time Toshiba management in denied the claim.
In January 2014 Toshiba finally conceded that their move into the TV was being terminated in Australia and that there would be no new TV models launched this year. 

Whittard now Managing Director of Toshiba Australia was one of the executives working at Toshiba architects who in 2006 orchestrated the takeover by Toshiba Australia of their AV business which included TV’s which in the past had been sold into the australian market by Castel a Melbourne based distributor via a Toshiba subsidiary in Singapore. 
Castel sued, and was awarded millions in damages and costs by the Federal Court.