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NEC Computers reviews operations in EMEA

Microscope contributor

NEC Computers could be the first casualty of the slowdown in PC sales and ferocious competition in the market after admitting that it is reviewing operations in EMEA which may lead to a withdrawal from the region.

The Japanese firm has been a bit part PC player in the EMEA market in recent years and sold around 500,000 units across the territory during 2008, achieving a 0.48% market share according to IDC.

An NEC spokesman confirmed the company is in discussions with union representatives at its French subsidiary with a view to halting PC production and rationalising the plant, which employs 510 staff.

The firm expects a $3.2bn net loss and has been speeding restructuring plans which include exiting weaker businesses and cutting 20,000 jobs worldwide.

Sales to the public sector in France account for 70% of total sales in EMEA said Eszter Morvay, research manager at IDC, who added: "When a vendor is so reliant on one country it is very difficult to compete against the major brands".

Both HP and Dell have been competing aggressively in the corporate markets and Acer has risen to greatness in the SME and consumer arenas. In the past NEC has expressed a reluctance to fight it out on price with rivals.

Coupled with the slowdown in the industry - felt acutely in the mature PC market - NEC has also failed to move with the times as the market shifted aggressively to notebooks. Around 90% of its shipments last year were desktops. 

"NEC has not followed the market shift in the last two years," said Morvay, who pointed out NEC's best years in recent times were 2005 when it shipped 2.8 million PCs and accounted for 4% of EMEA sales.  

At the time, NEC owned Packard Bell, which was sold in late 2006 to Lap Shun Hoi, the founder of eMachines.

Last year, NEC moved to a 100% indirect model in now what appaears to a final throw of the dice, and had planned to recruit a broadline distributor to drum up interest in the brand among resellers.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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