TWICE recently sat down with Mal Ransom, senior VP of marketing for Packard Bell NEC, and discussed the company's current and future direction in the wake of the massive reorganization undertaken last year.
TWICE: What impact has last year's reorganization had on the company?
Ransom: The company is now stabilized, and there are no further layoffs planned. We are now down to four basic models in both the Packard Bell and NEC brands, which had contained upward of 20 early last year. In addition, the reorganization helped us make our first-quarter profit margin target. However, like most of the market we are having a challenging second quarter.
TWICE: Why was the second quarter so tough?
Ransom: That's hard to say. It's normally a slow period, plus the fact that the first quarter was much better then expected, so a falloff could have taken place.
TWICE: What does the new NEC Z1 PC represent for the company?
Ransom: The Z1 is the flagship model for the NEC line and will play a large part in the separation that has occurred between the Packard Bell and NEC brands. Starting last year Packard Bell has focused on the family, while NEC is for the upscale customer with a family income of over $100,000 and the small business community.
TWICE: How are the two brands being split?
Ransom: At first we targeted the Packard Bell PCs below $1,000 and NEC above that mark. But now price relative to technology has changed so the divider is not so much the money but the technology. NEC will get the Pentium III processors and new technology, and these will then work their way down to Packard Bell. So there could be Packard Bell products priced above $1,000 and NEC below that point.
TWICE: Will the industrial design direction started with the Z1 be spread throughout the NEC line?
Ransom: There will be a trickle-down effect to lower-end NEC models. However, these will probably just include the color scheme to give the line a "family" appearance and won't include the all-in-one design of the Z1 or the LCD monitor.
TWICE: Is the company looking at incorporating any type of Internet service provider deal with its PCs?
Ransom: We will become involved with whatever type of ISP situation makes sense. Probably not a free ISP or one where the user signs up to be a conduit for advertising offers. Starting in July, Packard Bell NEC will have its own site called Urocket.com. Our customers can sign up for unlimited access for $19.95 per month or limited for $14.95.
TWICE: How will broadband Internet access change the industry?
Ransom: We are on the cusp of broadband right now and it will make a difference -- because with it the model changes completely. Then you will have a PC that stays on all the time, just like a TV. This [changeover] will happen very fast, and we will have to react quickly to these new models.