LG re-enters laptop market

After getting its strategy wrong twice in the personal computer market, LG Electronics India is making a third go at it with the launch of 13 notebooks at prices ranging between Rs26,000 and Rs66,780.

And the consumer electronics major believes it will be able to sustain its PC business this time round as it has a better understanding of the Indian consumer’s needs and consumption pattern than before.

“The (PC) market is mature today and with a laptop market of 4.4 million growing at 20%, there is a huge scope for us,” said Sanjoy Bhattacharya, product group marketing head - IT, LG Electronics India Pvt Ltd.  

The company first forayed into the Indian market in 2003 with desktop PCs and then returned with laptop and desktop in 2006 only to down shutter in 2009. It is back now with notebooks which cover all price points in the consumer segment.

Company officials said the notebook business will boost LG’s revenues from IT division to Rs1,000 crore in 2012. The division is expected to close the current year with a turnover of Rs860 crore. 

What has boosted LG’s confidence in the Indian market is technology research firm IDC’s forecast of laptop sales at a compounded annual growth rate (CARG) of 32% from 2010 to 2014.

According to IDC, unit PC sales in India grew by 17% in the January-April quarter even as revenue sales figure dropped 12.8% in the same period as average selling price in the market fell due to competition. It has yet to come out with the April-June quarter numbers. 

Bhattacharya said the Korean company firm was confident of garnering a 3% market share by the end of the next year.

“For the next two years, we will be targeting the consumer segment of the market and then we will address B2B (business to business) segment,” he said.

The company would be feeding the Indian market with imported laptops from Korea and China till it attained critical mass of over one lakh unit sales. “Once, we reach that (one lakh unit sales), we will begin manufacturing laptops at our Pune plant,” said Bhattacharya.

An analyst with a leading technology research firm said the Korean electronic major may well succeed as it is now a strong consumer electronics brand in India but may falter if it did not position itself right.

“There are three kinds of players in the PC market today - Apple and Sony at the premium end, Dell, Samsung and Lenovo in the mid segment and Acer, HCL and others at the lower end. HP has presence in all three segments but does not have a lead in either of them. I don’t know where LG would fit,” he said.