NEC bows out of entry level LCD market

NEC Australia, a provider of commercial LCD display solutions, said it would be exiting the entry level LCD monitor market, to concentrate on its mid to high end range of LCD product.

Daniel Hancox, national channel manager of NEC’s newly consolidated Commercial Display Solutions division said this was a strategic move for NEC.

“We will now be able to concentrate our efforts on the products that provide the best quality for our customers, and the most profit, for our distribution channel and NEC. It’s no secret that no one is making any money in the entry level LCD product,” he said. “By concentrating our efforts on the rest of the market we’ll be able to offer extremely competitive pricing and better service to our channel.

“The reality of this situation is that we need to stay profitable whilst maintaining the high level of quality and performance that NEC is renowned for in their LCD’s. And the only way to do this is through our mid to high end range,” said Hancox.

In an interview with CRN recently, Hancox said higher-end display products gives resellers an opportunity to make higher margins.

“Let’s face it resellers are better off advising a financial institution on the usage of digital signage and looking at these types of products. There’s definitely more advantage to selling a total solution, then competing in the CE market, where end users can jump on the net and get a better price on a TV,” he said.

According to Hancox there is no change expected to be made within the current distribution channel structure.

“Distributors concentrating in the entry level space may be affected. However after discussions with our channel partners, the majority of distributors were more than happy to make the change with NEC, seeing it as a logical and strategic move for both NEC and their businesses. Resellers and integrators will not be affected, with most focusing on the mid to high end product range already,” he said.

The news follows Hitachi’s decision to shut its local CE division, on 22 January.
At the time, Dipak Kumar, general manager, Electronic Components Group told CRN Hitachi’s head office will start to concentrate on areas where it feels it doesn't have much of a presence.

“We want to ramp up the B2B division in Australia. This includes specialist products like business-grade LCD screens and projectors,” said Kumar.