The days of Toshiba Corp. dividing the market of personal computers into Digital or Media segments are numbered, as the Tokyo-based company this week announced that it would split off its computer business starting 1 January.
According to the equipment maker, its nascent “Personal Computer & Network Co.” will be a peer of the existing Mobile Communications Co. and Digital Media Network Co.; the new division was formerly part of the latter. All together now form Toshibas Digital Products Group.
According to Toshibas announcement, the goal of this restructuring is to spark a renewed focus on the companys personal computer business and turn it towards profitability. This is a pressing concern, as losses for the existing personal computer division are expected to be $196 million, compared to initial predictions of over $200 million in profit.
From 1993 to 2000, Toshiba was the most popular notebook computer manufacturer. However, the company saw its position eroded on the one side by specialized models from companies such as Sony Corp. and on the other side by Dell Inc., which used its vertically-integrated sales model to cut margins. Currently, Toshiba is ranked third behind Dell and Hewlett-Packard Co., holding on to approximately 13 percent market share.
/zimages/6/28571.gif
This move follows the companys September announcement of a “major” change to its computer business. Toshiba cut costs by shedding over 500 jobs, simplifying product design and increasing its use of outsourcing.