GATINEAU, Que. – NEC Corp. is buying back a company it shared with Mitsubishi, ending a joint venture between the display giants that lasted five years.
The company, called NEC-Mitsubishi Electric Visual Systems, was supposed to marry Mitsubishi’s strengths in CRT development, manufacturing
and sales and NEC’s strengths in PC monitors. However, the rapid migration of buyers from CRT to LCD technology prompted NEC to terminate the relationship.
“”Four years ago, in 2000, the joint venture was created that benefited both companies,”” Clark Brown, vice president North American sales for NEC-Mitsubishi, said in an interview here during the CompTIA Canada system builders’ breakaway.
“”NEC brought world-leading LCD technology; Mitsubishi brought world-leading CRT aperture grill technology.””
“”What we have seen, though, is CRT volumes decline more rapidly than expected. So it was time for both companies to go their separate directions. And it was a success and it was beneficial to both companies,”” he added.
According to Brown, NEC will see increased growth opportunities because it will have increased access to R&D from NEC. He said NEC products will remain the same and that existing products in the field will be supported.
From April, as part of its digital media business, Mitsubishi Electric will manage its Mitsubishi brand monitors, which were sold by NM Visual to date.
Bruno Pupo, area director for NEC-Mitsubishi Canada, said no staffing changes here are planned. Customers will be able to contact their sales reps as usual.
The end of the joint venture will also mean greater focus on the NEC brand in North America, Pupo said.
One NEC-Mitsubishi reseller thinks the deal will benefit NEC.
“”NEC-Mitsubishi has been losing market share for a long time,”” said Frankie Wong, president of Elco Systems Inc. of Markham, Ont. “”I think this move will be very positive. NEC is a channel-friendly organization and they will invest more money in the channel and become more competitive in the market place.””
Wong added that NEC-Mitsubishi made quality products but were priced too high compared displays from Acer and BenQ.
“”We need someone in this monitor market to balance out the business between the LGs and Samsungs to the Acers and BenQs,”” he said.
In response to Wong’s comments, Pupo stressed that NEC sees the deal as a chance to capture more market share.
“”This will expand our exposure,”” he said. “”We have some great technology products that belong to the sister company. In the market place it gives us a great opportunity to bring a total solution to customers. It widens our scope from an R&D perspective. There are products that are not yet on the market that will be accessed by the NEC subsidiary.””
NEC Corporation, a $47-billion provider of computer and communications solutions, will rename and re-position NEC-Mitsubishi as an NEC display solutions company.
The deal takes affect on March 31. Financial terms of the deal were not disclosed.
With files from Paolo Del Nibletto