Japanese conglomerate NEC has pulled the plug on its US PC maker, Packard Bell, after another year of bigger than expected losses.
But while the Packard Bell brand will now disappear from US retail stores, there are plans to continue to use the name in Europe and for sales over the Internet.
And an NEC spokesman claimed that a report by Dataquest Europe, which is due to be released on Friday, indicated that Packard Bell NEC is in pole position for European consumer and home sales. Dataquest would not confirm the statement, however.
In the US, Packard Bell NEC plans to close down its main manufacturing facility, which is based at its headquarters in Sacramento, California, and as a result, will lay off most of the 2,600 employees who work for the company.
This includes most of the business' senior executives including Alain Couder, its French chief executive who was brought over from minority stakeholder, Groupe Bull, last August.
But the layoffs do not include NEC's Computer Systems Division, which also sits under the Packard Bell mantle, and will continue to sell PCs, notebooks and other hardware and services to corporate America.
Schelley Olhava, an analyst at IDC, said, however: "Packard Bell as we know it [in the US] has gone".
According to Intelect ASW Marketing Services' PC Channel Tracking service, as recently as 1997, the company was the number one manufacturer of PCs sold through the retail channel, claiming a 29 per cent market share.
But Dataquest said that its current share of the market was now a fraction of one per cent and the supplier was now in sixth position in the retail PC sector.
Its fall from grace came about despite NEC and Groupe Bull's investments of about $2 billion over the last two years. Analysts claimed, however, that Couder was under instructions from Japan to keep losses to below $100 million for fiscal 1999, and when they ballooned to $150 million, NEC decided that enough was enough.
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