The rise of low-cost PCs is the main reason for Toshiba's abandoning the market, Mike Stinson, senior director of product marketing at Toshiba, told CNET's NEWS.COM in an interview tonight.
Infinia consumer PCs were introduced only last September. The line competes head to head with the Compaq Computer Presario line, the Hewlett-Packard Pavilion, the IBM Aptiva, and Packard Bell models at large computer retailers such as CompUSA and on big online sales sites such as Computer Discount Warehouse.
"There?s been a tremendous [price] shift downward. We're hearing from some [resellers] that 70 percent of the market is below $1,400...30 percent is below $1,000," Stinson said.
"Infinia is not positioned for this kind of market. It is not designed to be a $999 PC, and it never will be," he added.
The Infinia is marketed as a high-end consumer computer with a panoply of multimedia features. Typically, the Infinia has been priced at more than $2,000. The news about Toshiba's strategy shift was first reported by Computer Retail Week.
Toshiba will now give precedence to its Equium desktop business PC line and to preparing for its entrance into the server computer market next year, Stinson said.
The winner appears to be Compaq, which has taken what can only be described as a scorched-earth policy in its attack on the consumer PC market. Compaq has blanketed every segment of this arena and has been particularly aggressive at the low end.
For example, Compaq offers a Presario that sells for about $795 with a 180-MHz Cyrix processor, a 1.6GB hard drive, modem, and CD-ROM drive.
But Toshiba isn't the only one feeling the effects. IBM recently restructured its consumer PC group to better deal with the low-cost phenomenon and promptly began to sell a sub-$1,000 box. Like Toshiba, IBM's Aptiva computer models were clustered perilously at the high end of the consumer market.
Toshiba will continue to sell notebook PCs in the consumer channel, according to Stinson. Toshiba will also leave open the possibility of selling selected Equium models to the consumer channel "if they want it," he said. Toshiba's Equium line is designed as a business PC for corporate customers.
The company may also look at getting back into the consumer market at another time with a low-cost "convergence" product that combines the functions of a PC and TV, Stinson said.
Toshiba will not bring out any new Infinia models and will sell off its inventory, he added.