14 DAY TRIAL // NEC, one of the Japan's leading computer system makers, has recently announced that it plans to reorganize its business and that it will exit the PC market outside the Asia-Pacific region. According to the company, the main reason for the recent decision is a slumping demand and a tough competition. As a result, NEC will focus its PC sales in the Asia-Pacific market and will also be forced to cut a part of its workforce worldwide.
According to preliminary figures, NEC expects a net loss of approximately 290 billion yen ($2.96 billion), for the business year that will end on March 31, 2009. In addition, the company plans to accelerate its restructuring plans, which will include a pullout from weak business and the reduction of its workforce by approximately 20,000 employees worldwide. According to NEC, the recent restructuring plan is a consequence of the stiff competition it had to manage from major rivals such as HP and Dell.
NEC will withdraw from the PC business in Europe, Africa and the Middle East, due to slumping demand and the stiff competition. The decision appears somewhat justified, given that from the company's overall PC business of 3 million PCs, only one-sixth of that represents NEC's sales outside Japan.
The news should ultimately benefit all those major PC vendors, including HP and Dell, which will now have one less competitor to worry about. On the other side of things, a market with more competitors can benefit the end-user, which has a wider range of alternatives and can ultimately search for the best deal.
NEC has made an effort and has also entered the emerging market of small-sized, low-power portable computer systems, also known as netbooks. The company's product, dubbed LaVie netbook, has been designed on roughly the same Intel Atom platform as most of its competitors on the market, making it difficult for NEC to establish itself as one of the leading netbook vendors.