Toshiba Corp. made a big bet on its local operations last year by moving a television unit here, making Irvine the design and marketing hub of all for its consumer electronics.
The move cut costs and combined the fastest-growing parts of Toshiba’s consumer electronics business, according to Mark Simons, chief executive of Toshiba America Information Systems Inc., a unit of Tokyo-based Toshiba Corp.
The company’s U.S. business selling digital TVs, Blu-ray players and other products moved from Wayne, N.J., joining Toshiba’s laptop PC division here.
Toshiba hopes the move will allow it to better go after what’s dubbed the “connected home,” a trend in which more home electronics are linked together to share videos, music and other files.
“We wanted to maximize this idea of the connected home,” Simons said. “We thought it fundamentally important not only to make televisions a part of TAIS, but also part of the PC group.”
Like others in consumer electronics, Toshiba envisions a time when video can go from screen to screen—from, say, a smartphone to a computer to a television—seamlessly and without wires.
“All screens are going to be connected in the future,” Simons said. “I know that customers will want to see the images from their PC on a TV, and they want it to be made simple.”
Toshiba shut down Toshiba America Consumer Products LLC, the New Jersey consumer electronics unit, late last year.
Less than a dozen workers from New Jersey moved to Irvine. Another 25 jobs were added to support the TV unit here.
Toshiba America Information Systems has some 600 workers here. Design and engineering for laptops and TVs are done in Irvine.
In the consolidation, the Irvine operation gained an office in Nashville and a factory in Mexico that makes TVs for the U.S. market. Toshiba also makes sets in Asia.
Combining the units made financial sense, according to Simons. The units spent the better part of last year identifying what functions could be joined together and what duplicated jobs could be cut, he said.
Shared Customers
The consumer electronics and computer units have a lot of the same customers.
“We shared a lot of similar customers, such as Best Buy, Office Depot—all of the consumer electronics mass merchants and retail distribution partners,” Simons said.
Toshiba’s Irvine operation also offers easier access to overseas plants and Toshiba’s Tokyo headquarters.
The Irvine operation has four business units:
• The digital products division, which makes laptops, TVs, netbooks, camcorders, Blu-ray and other DVD players.
• The storage device division, which makes portable data storage drives.
• The telephone systems division, which makes telecommunications gear for small and midsize businesses.
• The imaging systems division, which makes cameras that go into medical devices.
Toshiba Corp. has three other separately run units here. Toshiba America Medical Systems Inc. sells medical diagnostic equipment. Toshiba America Business Solutions Inc. deals in office equipment. Toshiba America Electronic Components Inc. sells chips.
Reporting, U.S. Board
At Toshiba America Information Systems, general managers of each business unit report to Simons, who reports to a U.S. board made up of Toshiba executives.
The local company is run fairly autonomously, Simons said. It reports separate financials to its Tokyo-based parent but doesn’t disclose any details about its sales and profits.
Toshiba is one of several companies that design and market high-tech TVs here, including Irvine’s Vizio Inc., Hannspree Inc. and Mitsubishi Digital Electronics America Inc., Orange-based Westinghouse Digital LLC and ViewSonic Corp., which is based just over the county line in Walnut.
Toshiba is looking to stand out with a broad line of consumer electronics, according to Simons.
“So many of our competitors have TVs, or they have PCs,” he said. “We’ve got the whole gamut and the technology to make it happen.”
Earlier this month at the International Consumer Electronics Show in Las Vegas, the industry’s biggest trade show, Toshiba showed Internet-connected televisions and a sleek tablet computer that’s set to compete with Apple Inc.’s dominant iPad.
Toshiba isn’t always first with the latest gadgets and tends to hold off and wait and see what features consumers want, Simons said.
“There are devices that will be for content consumption and there will be devices for content creation,” he said. “One of the things we are trying to do is understand how people want to use, access and create content.”
Toshiba’s tablet runs on Google Inc.’s Android operating system, has connection ports, cameras on the front and back and special contrast settings so it can be used inside and outside.
“As the tablet market moves from intriguing to the serious, we are ideally positioned,” Simons said.
The company also debuted what it called the “world’s first” glasses-free 3-D TV at CES. Other sets require viewers to wear glasses to get the 3-D effect.
Market Share
Toshiba has about 8% of the U.S. TV market and about 9% of the market for PCs, according to mid-2010 reports by market researchers Stamford, Conn.-based Gartner Inc. and International Data Corp. of Massachusetts.
Simons has spent nearly two decades at Toshiba. He took the top post in 2008 when Masa Fukakushi was promoted to chief executive of Toshiba America Inc. in New York.
Simons is the first non-Japanese executive to lead Toshiba America Information Systems.
