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Samsung threatens to abandon the laptop market

Samsung will cease operation of its laptop division if it doesn't improve its market share and beat that of Sony by 2011, Crave has found out

Samsung will cease operation of its laptop division if it doesn't improve its market share by 2011. That's according to one of the company's senior managers, Sukyong Hong.

The news was broken to Crave while on a visit to Samsung's headquarters in Suwon, South Korea. Hong, the senior manager of overseas sales and marketing for the company's computer division, said an extra 11 million units must be sold worldwide by the year 2011 in order to reach 5.7 per cent market share -- a massive ask, considering Samsung's worldwide market share has only grown from 1.2 per cent in 2005 to 1.7 per cent in 2007.

To stay afloat, Samsung says it will have to -- at least -- overtake Sony, which currently lays claim to 6 per cent of the laptop market. The rest of its primary competitors seem out of reach. Toshiba has 10 per cent, Dell is on 14 per cent, Acer has 16 per cent and HP tops the charts on 23 per cent.

One of the most obvious ways of increasing market share is to venture into the mini PC market along with the likes of Asus, HP and MSI, but Samsung seems reluctant to do so. The company fears that making a low-cost laptop will jeopardise sales of its existing machines. One alternative is to enter the US market. Currently the only Samsung laptop being sold in America is the Q1 UMPC, which isn't a consumer favourite due to its high price and questionable usability.

The irony of this story is that Samsung provides many of the components used inside Sony laptops, including the LCD panels -- so even if Sony does kick its proverbial backside, it's not exactly the end of the world. -Rory Reid

Update: Following this story, Samsung's PR people contacted us with this statement: "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 per cent 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."