No more NEC in Australian retail

Japanese vendor to cut 200 staff and cease offering laptops, desktops, whitegoods, consumer appliances, home entertainment products through retail

NEC Australia has announced a cessation of its retail operations commencing March 1, with 200 staff to be made redundant.

Laptops, desktops, whitegoods, consumer appliances, home entertainment products such as DVD players, consumer LCD and plasma TVs will no longer be available on Australian store shelves after the Japanese vendor announced restructuring plans. However, NEC will still continue to offer laptops and desktops through its business solutions division as it focuses solely on its IT/network communication solution offerings.

The vendor will also continue to supply digital signage displays and its commercial range of projectors and servers. NEC general manager of marketing, Craig Norton, said the retail component was important, but not a significant part of the business.

“The weakening Australian dollar has precipitated the decision for us and given us cause to think about where we need to have our focus,” he said. “We will now focus on the substantial part of our business, which is our core skills around IT/networking to business and government customers.”

Norton added NEC Australia was the last NEC company globally to offer consumer products.

“The future of our business in Australia is clearly in the business and government market,” he said. “This is actually the largest part of our business. We’ve got one of the biggest research and development centres in Australia on a 13 acre site, there’s still a tremendous amount we do in that space.”

As a result of the restructure, about 200 staff will be made redundant or leave voluntarily by the end of March. Prior to the announcement, NEC had 1200 staff locally.

The vendor will continue to provide warranty and extended support agreements to customers.

IDC PC analyst, Felipe Rego, wasn’t surprised by NEC’s decision to exit the retail space. In Q3 2008, NEC barely occupied one per cent of the total desktop and notebook market.

“NEC’s share of the PC market wasn’t very strong; the focus has always been in the business space,” he said.

Other vendors that have left the notebook retail space behind include Samsung and LG.

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