Samsung to quit laptops in 2011, unless it triples market share

South Korean company says beating Sony is minimum “survival” situation

Samsung will close its laptop division in 2011, unless it triples its market share in the sector, admitted Sukyong Hong, senior manager of overseas sales and marketing, yesterday.

Hong said this is the minimum it will need to sell for its laptop business to survive in the face of falling laptop prices. Beating Sony, who currently occupies ninth position world-wide, was the key to its success he said.

Dinesh Chand, UK Product Manager for Samsung's Mobile PC division, clarified the company's position, saying: “It’s not a matter of survival, but about sustainability.”

“A lot of smaller manufacturers, like Evesham, will disappear,” he said.

Samsung had a 1.7 per cent market share in 2007 and must increase to a 5.7 per cent market share in 2011 “survive”. Since it wants to increase its market share in a growing market, this equates to selling 11million laptops in 2011, up from just over 1m in 2007.

Samsung currently sells notebooks in 10 countries, including a handful of European and Asian states. Samsung hopes to double the number of laptops it sells in the UK to 200,000 in 2009, as well as start selling notebooks in the United States and at least two more European countries to achieve its improved sales tally.

Samsung stressed it will not achieve these big numbers by introducing a low cost laptop, like the Eee PC, but instead focus on premium laptops.

The threat to leave the market came after a power point presentation shown to journalists in South Korea appeared to accidentally show “minimum survival target”, which Hong went on to clarify.

Update 19/05/08 Samsung has since released the following statement concerning our story:

“Following a story published yesterday regarding the long term strategy of the Samsung Electronics Notebook PC Division, Samsung would like to clarify its position. Samsung has no intention of closing its Notebook division in 2011. We do however expect the market to become increasingly saturated and therefore for there to be increased price competitiveness.

In light of this Samsung Electronics has set an ambitious but realistic goal of achieving 5.7% market share by 2011 to sustain profitability. This level of market share should not be linked to survival within the marketplace but to ensuring sustainability for long term business growth. This has been demonstrated in Samsung Electronics’ continued expansion into new markets, most recently entering Italy in August 2007 and Poland in March 2008. Samsung has an aggressive growth strategy for 2008."