. – 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
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
“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
MDEA remains the only major manufacturer in the
consumer microdisplay rear-projection TV category,
making systems with DLP-based light engines.