NEC on Monday said it is buying back NEC-Mitsubushi, ending a joint venture between the display giants that lasted five years.
NEC-Mitsubishi executives said migration
from cathode ray tube (CRT) to liquid-crystal display (LCD) technology prompted NEC to terminate the relationship.
The joint venture began quietly in Japan, where the two companies’ engineering teams have already began working together on joint development efforts. NEC-Mitsubishi later impressed crowds at Comdex Fall in Las Vegas with products that included a 30-inch LCD display.
“Four years ago, the joint venture was created that benefited both companies. NEC brought world-leading LCD technology, Mitsubishi brought world-leading CRT aperture grill technology,” said Clark Brown, vice-president North American sales for NEC-Mitsubishi. “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.” According to Brown, the NEC display subsidiary will see increased growth opportunities because it will have increased access to R&D from its sole corporate parent. He said NEC products will remain the same and that existing products in the field will be supported.
Bruno Pupo, area director for NEC-Mitsubishi Canada, said no staffing changes are planned, adding customers will be able to contact their current sales reps.
“Having the two companies now set apart will certainly will have a greater focus on the NEC brand in North America, which is typically a stronger brand,” 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 now that they are NEC.”
Wong added that NEC-Mitsubishi made quality products but were priced too high compared to Acer and BenQ.
“We need someone in this monitor market to balance out the business between the LGs and Samsungs to the Acer’s 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 Corp., 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.