LG and Samsung have stopped selling notebooks in the retail sector to focus solely on the commercial channel.
Samsung national sales manager, Joe Serra, said it cut ties with notebook mass merchants earlier this month. These included Harris Technology, Bing Lee and Dick Smith. Retail made up about 20 per cent of the vendor's overall notebook sales. Its notebooks would still be available through the commercial channel.
"The issue for us is sustaining a competitive advantage. It was difficult to maintain the margins mass merchants were after," he said.
One of the biggest problems Serra cited was that retailers were given full access to Samsung's complete notebook range. This had caused increasing friction between IT dealers and mass merchants.
"Mass merchants offer volume and uniqueness, but you have to offer that in return otherwise it becomes confused," he said.
Serra didn't rule out a return to retail at some stage in the future. Samsung will also continue to sell other IT product lines such as monitors, printers and external IDE drives through mass merchants.
Unlike Samsung, LG national channel manager, Charlie Harb, said it had maintained separate SKUs for local retail and channel since launching three Centrino-based products in 2003. But he also attributed its decision to margins and profitability. It is understood LG's key retail partner had been Harvey Norman.
Although retail was initially the focus for its notebook push and had represented a higher percentage of sales, Harb said channel growth was now stronger.
The vendor is planning to release new notebooks next year to coincide with the launch of Microsoft Vista.
Both Harb and Serra also acknowledged the increasing dominance of players such as HP, Toshiba and Acer on retail shelves.
According to IDC PC analyst, Liam Gunson, LG and Samsung retained market share during Q3 but would have begun to feel the pressure of slowing notebook growth. Although shipments grew 22 per cent year-on-year in Q3, the results were down from the 30-50 per cent recorded during 2005.
"These vendors are filling niche areas and are profitable but they're unable to make larger market share gains," he said. "A lot of notebook growth is coming from retail, which is where Toshiba, HP and Acer have a strong focus. There's a lot of competition there for smaller players. " One vendor resurrecting its retail strategy is BenQ. It plans to launch a new range of notebook SKUs in January. Its retail partners include Harvey Norman, Officeworks and Dick Smith.
"Our notebook retail sales are negligible at the moment as we haven't had the right product," BenQ managing director and Asia-Pacific vice-president, Phil Newtown, said. "We have been treading water for the past 12 months. "The notebook market is a very competitive space. We have seen a major slide in price point and we haven't been able to follow it. We've now got better product and R&D and are in a better position for the next 12 months."