PC Industry Consolidation Will Continue
Samsung will end its sales of laptops and Chromebooks in Europe, according to PC Advisor magazine. The news comes as a surprise given Samsung’s tenacious nature and its desire to have a presence in all segments of consumer connectivity. Samsung introduced several laptops earlier this year, and the company’s Chromebooks have become global flagship products for Google’s cloud-centric OS.
However, Samsung’s strategy shift is an acknowledgement of the realities of the PC market. Sony announced earlier this year that it would exit the PC business after almost two decades. Sony wasn’t able to gain the scale required to make the unit truly profitable, despite establishing Vaio into a reasonably well-known computer brand. Samsung, unlike Sony, isn’t exiting the global laptop market, and the company could return to selling PCs in Europe if market conditions change, but that appears unlikely.
In an attempt to counter a major potential disruption from Google’s Chrome OS, Microsoft recently announced several partnerships with leading PC makers to enable low-cost Windows laptops. HP, for example, introduced a $300 laptop earlier this month based on Microsoft’s reference design, and several Asus and Dell Windows models can already be found for considerably less.
Six players control 65% of the PC market: Acer, Apple, Asus, Dell, HP and Lenovo. All other PC makers have difficulty scaling up to profitability in a market of near-indistinguishable products. There’s no comfort zone even for those top market brands. A decade ago, the eponymous maker of IBM-compatible machines decided to leave the business for something greener. Super-thin profit margins and declining selling prices in a saturated market are a formula for change.
Samsung’s wisely catching its breath and preparing to concentrate on its smartphone businesses as well as potential new-growth areas such as the smart home, wearables and hybrid devices. After all, Samsung’s the world’s second-leading tablet maker after Apple. As device forms begin to overlap, Samsung is wisely approaching the market from its position of strength by leaving the traditional laptop business to others.
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