Toshiba's Channel Charge
Solution providers say the gains are due in large part to the new channel program, introduced in April, which has provided significantly higher profit margins for the channel and eliminated channel conflict.
According to research firm Gartner Group, Toshiba gained market share in the United States during the third quarter of 2006. Gartner said Toshiba grew PC shipments in the U.S. by 22.3 percent, from 664,000 units during the third quarter of 2005 to 813,000 units during the third quarter of 2006. Of the top five vendors in U.S. market share, only Apple, Cupertino, Calif., and Toshiba registered double-digit growth in the U.S. during that three-month period. Toshiba also grew its U.S. market share from 4.1 percent to 5.1 percent during the quarter, according to Gartner.
John Marks, CEO of JDM Infrastructure, a Chicago-based solution provider, said his Toshiba business is up since the launch of the new channel program.
"My fist is in the air and I am yelling Jer-ry, Jer-ry, Jer-ry," said Marks, referring to the impact that Toshiba Vice President Jerry Lumpkin has had on the channel and not celebrated TV talk show host Jerry Springer. "It's exciting to see a vendor who was so far out of it come back with a great channel program that is working for our reps and management."
Marks said he hopes other vendors that have turned their backs on the channel stand up and take notice of what Toshiba has accomplished with the new channel program.
Dan Hogan, vice president of DSR, an Elkridge, Md.-based solution and service provider and Toshiba channel partner, said he is not surprised by the vendor's market share gains.
"I think they are on the right track right now with their channel programs," Hogan said. "They've got some great new programs in place that allow resellers to earn a lot better margin than they have in the past. They've raised the warranty reimbursement rate for service centers. And they are offering new customer bonuses for bringing in new customers.
"And they have some great products out now," Hogan said. "They are pretty much firing on all cylinders."
Toshiba is currently working to boost the number of upper-tier channel partners in the company's ranks.
The Toshiba program launched earlier this year included a substantial boost in rebates for VARs, including a doubling of the rebates for top-tier Platinum partners and a 1 percent rebate for Silver partners, up from zero in the old channel program.
As part of its market share grab, Toshiba is getting a lot closer to market darling Google.
Starting next year, Toshiba will offer Picasa, Google Desktop, a browser search toolbar, GoogleTalk and Google as the default search provider in its business notebooks, such as the Tecra. Ad Aware and security software won't be included.
"Our deal [with Google] is expanding Jan. 1," said Jeff Barney, vice president of marketing for Toshiba's Digital Products Division, Irvine, Calif.
Earlier this year, Google rolled out Google Pack, which includes Ad Aware and security software, in addition to several other applications. And last week, Google launched Google Docs, which combines Writely, the online word processor it acquired this year, and Google Spreadsheet.
The Mountain View, Calif.-based search and software company continues to press for eyeballs in the PC space after signing a similar deal with Dell earlier this year. Besides providing preloaded software for Dell computers, Google maintains a Dell startup page for Dell customers that offers a portal showcasing Google and Dell news, services and products.
"We've been working very hard, particularly in the last year," said Mark Simons, vice president and general manager of the Toshiba Digital Products Division. "We've been pleased with the way we've regained credibility with the solution providers. They are our primary [go-to-market] strategy, without a doubt."
Simons and solution providers, including Hogan, have agreed that in past years Toshiba has been dogged by a reputation as a vendor associated with channel conflict. Hogan said he believes the company has taken affirmative steps to alleviate that.
"We deal with all the manufacturers," Hogan said, noting that there are cycles where various vendors re-engage or re-embrace the channel after drifting or pursuing conflicting strategies. "Right now, Toshiba is in the fixing-up-the-problem mode and it seems to be working."
STEVEN BURKE contibuted to this story.