SCIENCE/TECHNOLOGY : Toshiba America Weathers a Year of Turbulence, Tough Competition

Toshiba America’s computer division in Irvine has had a turbulent year.

Only a year ago, Toshiba America was locked in a lawsuit with Tech Data Corp., a Clearwater, Fla., computer distributor. Toshiba had decided to dump Tech Data and five other distributors and rely solely on Merisel, a national distributor based in Torrance. When Tech Data was late in settling its accounts, Toshiba sued for breach of contract. The companies eventually reached an out-of-court settlement.

Since that time, a host of competitors such as AST Research Inc. in Irvine have begun trying to chip away at Toshiba’s position as the No. 1 seller of laptop and notebook computers in the United States.

That, along with the recession, has forced Toshiba--a unit of Japan’s Toshiba Corp.--to slash prices on its computer line several times this year and lay off more than 225 people. Bill Johnson, head of the computer division, quit unexpectedly in April.

Then, last week, Toshiba said it was switching distributors again--this time from Merisel back to Tech Data. The move isn’t willy-nilly, says Doug Kass, an analyst at Dataquest, a market research firm in San Jose.

“This is an industry with an extremely short memory,” he said of the new agreement between Toshiba and Tech Data. “Toshiba has a long history of jumping from distributor to distributor.”

Toshiba patched relations with Tech Data, a smaller distributor, because it wants to strengthen its focus on value-added resellers--industry jargon for dealers who buy a manufacturer’s product and enhance it with software designed for specific markets, Kass said.

“There is a move afoot among manufacturers to have greater presence among (resellers) because they need to have a good idea of who their customers are,” Kass said.

Two weeks ago, Toshiba announced it reached a deal with BizMart Inc., based in Arlington, Tex., to sell Toshiba computers at its chain of 60 office-equipment super-stores.

Tom Scott, vice president of sales for the Irvine computer division, said Toshiba will bring some new products to market in July. He said the company will continue to square off against leading manufacturers such as International Business Machines Corp. and Compaq Computer Corp., but he added that it will also offer products that compete with lower-priced machines.

Kass said Toshiba still sells 27% of all the laptop and notebook computers sold in the United States.