. – Mitsubishi Digital Electronics America’s (MDEA) recent decision to restructure operations and scale down TV production to focus on 73-inch and larger DLP rear-projection sets, LaserVue sets and front projectors left a number of the company’s current dealers wondering if they will be among those selected to continue with the brand.
In announcing the restructuring effort, MDEA spokesman Cayce Blanchard said, “We have faced significant price pressures, as have all major CE companies, and suffered serious losses.This restructuring offers us new opportunities for growth.”
Under the plan MDEA said it will scale back and re-evaluate distribution partners to keep only those accounts that fit best with the new direction.
The company also cut 170 jobs and closed distribution centers in Braselton, Ga., and Ontario, Calif., with some personnel relocating to Irvine, Calif.
The workforce in the company’s factory in Mexicali, Mexico, was also reduced, as production shifted to a lighter volume of super-sized large-screen sets.
In the transition, the company dropped LCD TVs and 60-inch and 65-inch rear-projection sets, going only with screen sizes measuring 73 inches and larger.
Blanchard said the company will also look to grow the LaserVue business while refocusing as a resource for big-screen DLP TVs.The company is adding a 92- inch DLP model to the mix this year, and dealers said larger sizes may be on the way.
Under separate sales units, the company also carries front projectors for the home theater and business markets, and stadium-sized LED displays and scoreboards.
The company’s forward looking strategy appears to be to stick with DLP until they can introduce a new display technology like OLED.
“They recently demonstrated a laser-based LCD display in Japan and demoed a 155-inch OLED display for digital signage at CES 2011,” noted Tamaryn Pratt, principal of Quixel Research.“Maybe they are planning to leverage these technologies in the future.”
Mitsubishi said it will be moving to a container-loadonly direct sales policy, leaving smaller dealers to work with two-step distributors, including longtime partner DSI.
Blanchard told TWICE, “The plan is to concentrate our sales efforts on large accounts and a few distributors.”
Meanwhile, Frank DeMartin, MDEA marketing VP, said MDEA has sold TVs very successfully through QVC for several years, online through Dell and more recently Walmart.com.He could not say if those relationships would continue under the new plan.
Quixel’s Pratt confirmed: “Mitsubishi has done very well with models sold at Dell, Walmart.com and QVC.It is amazing how a big screen at the right price moves volume.”
“I was disappointed to hear that they were walking away from the 60- and 65-inch models,” Pratt continued. “Maybe the margins are too small for their new operations, but it seems like they are walking away from good business compared to flat-panel price points.”
DeMartin said many of the particulars of the new distribution arrangements are still to be determined.
“MDEA continues to operate as it has through May 31, 2011,” he said.“We are now evaluating our distribution options for our new company, which will open on June 1, 2011.”
Mike Decker, electronics senior VP for Nationwide Marketing Group, said he was told that, going forward, MDEA will ship the group via distributor DSI Systems, one of two distributors (along with SED International) that comprise its Warehouse Direct Nationwide distribution program. “The new policy represents a significant volume opportunity for DSI, as a significant number of Nationwide dealers will transition to them,” he said.
Decker added, “There will be some members that may not agree with the decision to go through two-step distribution, but they will be able to realize some savings from truckload orders and will be able to combine shipments with other DSI orders.”
Jim Ristow, Home Entertainment Source (HES) executive VP, told TWICE: “Mitsubishi has been a great partner for many years.During this transition our goal is to help them the way they have helped us. We believe there will be business in the new screen sizes, like the new 92-inch model, and plan to continue to support them.”Ristow added, “The products need to be sold and not just clerked, and we excel at demonstrations, consultations and installations. We still see profitability in it for our membership.”
In a statement explaining the move, MDEA said the new structure is intended to “reclaim our position as the large-screen company.”
MDEA remains the only major manufacturer in the consumer microdisplay rear-projection TV category, making systems with DLP-based light engines.