Toshiba bows to home PC margin squeeze

Toshiba bows to home PC margin squeeze

Despite reports from the US late last month that Toshiba had jettisoned its consumer desktop PC business, Toshiba Australia officials confirmed there would be no ramifications for the Australian market.

In fact, Toshiba Australia has been reluctant to introduce the Infinia range of home PCs in Australia because it believes the local market is plagued by margin squeeze and strong competition.

According to Bruce Lakin, general manager of Toshiba's Information Systems division, the vendor opted not to enter the home PC market here citing reduced profits and low margins.

"At this stage all our attention is focused on introducing our new range of Equium corporate PCs and servers," Lakin said.

Toshiba's decision to phase out its line of Infinia home PCs next year in its desire to focus on the more lucrative and margin-friendly corporate market comes just a year after it signalled its intentions to enter the home market.

US officials suggested the change in strategy was prompted by the rise of a new category of PCs: the sub-$US1000 PC. In the US, the "cheap PC" trend has changed the face of computer retail sales in the last year, causing havoc for manufacturers unprepared for the public's demand for low-cost computers.

"The feedback we are getting from our retail partners is that an awful lot of the market is priced below $US1500," a Toshiba official said.

While Australian end users won't be getting their hands on sub-$1000 PCs, Lakin suggested a more realistic price for an Australian "cheap PC" would be about $1400.

But, he warned that if the "cheap PC" concept took off in Australia we would see manufacturers building sub-standard products and skimping on functionality and specifications such as memory chips and hard drives.

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