Local laptop makers losing grip at home

Samsung and LG have been keeping a firm grip on the local laptop market — but that might no longer be the case, with foreign brands eating up the domestic demand.

Customers look at laptops displayed at a discount mart in Wangsimni, eastern Seoul. [YONHAP]

Just as in the case of smartphones and various home appliances, Samsung Electronics and LG Electronics have long been the top sellers of laptops in Korea.

But price-competitive overseas brands have started gaining traction with local users in recent years with Taiwan's Asus topping the commercial laptop market, marking the first time for the Korean companies to give way to an overseas competitor.

Laptops have never been the local electronic makers’ forte in the global markets . While China’s Lenovo ranked first in the global laptop market with a 24 percent share in the first quarter of this year, followed by HP (20 percent), Dell (18 percent), Apple (9 percent), Asus (7.2 percent), and Acer (7.1 percent), Samsung Electronics and LG Electronics didn’t even make it to the top six and were categorized as “others,” in Gartner’s April report on the global laptop market. Others, which included Samsung and LG, took up 16.0 percent in total.

Asus' BR1100FKA laptop. Asus landed a deal to supply 260,000 units of its BR1100FKA laptop, 10,000 units of ExpertBook B1400, and 10,000 units of Chromebook Flip C214MA to the regional education office in South Gyeongsang. [ASUS]

At home, however, Samsung and LG have been keeping a firm grip on the laptop market, thanks to Koreans' preference for local brands and well-established customer service system — but that might no longer be the case, with foreign brands eating up the domestic demand.

Asus is one example, leveraging its cost-competitiveness to push its way up in the booming market.

“Asus laptops are known for being a bang for your buck,” said a 28-year office worker surnamed Seo, who’s been using laptops from Asus for eight years. Seo uses the Asus Vivobook Pro 14X laptop for editing images and videos, playing games and writing documents.

“A high-performance laptop from Asus costs about 1 million won ($779), while it would cost some 1.5 to 2 million won to buy laptops of similar performance level from Apple or Samsung,” said Seo.

Asus, as well as other overseas brands, are faring particularly well in workplaces and at schools.

In the first quarter this year, Asus outran Samsung and LG in the business laptop market — which includes public, private and education sector sales — with a 31.6 percent share, sharply up from 2.8 percent in the same period last year, according to market tracker IDC.

This is the first time for an overseas company to top the list, said Asus.

Samsung claimed 28.4 percent, and came in second place, down 10.5 percentage points on year. LG’s market share declined 9.5 percentage points to 17.4 percent.

Led by Asus, the combined market shares of overseas laptop brands — Asus, Apple, Lenovo, HP, MSI, Dell, Microsoft and Acer — reached 60 percent, up from last year's 32 percent.

Meanwhile, overseas brands also expanded their presence in the business-to-consumer laptop market against local competitors, with combined shares of 33 percent, up from 27 percent last year.

Samsung Electronics and LG Electronics are still ahead of the game with a total of 65 percent consumer market share, though the figure is 6 percentage points short of last year's 71 percent.

Samsung Electronics' Galaxy Book 2 Pro series released in April this year. [NEWS1]

Asus made rapid strides in the January-March period thanks to a large-scale government contract signed in February. The company landed a deal to supply 280,000 laptops with a consortium of LG HelloVision and BKSystems, which supplies smart devices to students in the South Gyeongsang regions through the local office of education. The laptops are being used for online lectures, digital education and student management, according to the Office of Education in South Gyeongsang.

“The smart device supplier came up with the Asus laptops in accordance with various criteria of ours — such as durability, diversity of input devices, and usability — within the budget, and students are currently using the devices in school lectures or for learning at home,” said Jeong So-young, an official at the regional education office in South Gyeongsang.

“There is some feedback that the devices are heavy, and though it’s true that they are inevitably heavier compared to expensive ultra-light models, we tried to choose the models that best fit our needs in terms of durability and touch screen options,” added Jeong.

One area where Asus clearly has an upper hand over local companies is its price tags.

Samsung and LG laptops long had reputations for lagging behind overseas competitors in terms of cost-benefit ratio.

The cheapest Asus laptops with 12th generation Intel core i7 processors and GeForce RTX 30 series graphic process units are priced at about 1.3 to 1.6 million won. Samsung models with similar specifications cost about 1.7 to 1.9 million won, though prices vary depending on the retailer and other additional options.

Samsung’s Galaxy Book 2 Pro (2022) and Asus’ Zenbook 14 OLED (2022) both come with Intel’s 12th generation i5 processor, and 16-gigabyte random access memory, though the former measures 39.6 centimeters (15.6 inches) in screen size and the latter 14 inches. Asus’ model costs about 1.3 million won, while Samsung Galaxy Book costs about 1.7 million won, both without Windows installment.

Improved after-sales service is another reason for local consumers’ growing preference for overseas brands. Foreign brands have been falling far behind local ones in terms of the number of customer service centers. Recently, however, companies are striving to attract big corporate clients with customer services benefits.

“The biggest weakness of cost-effective brands such as Asus, Acer and Lenovo was the after-sales services, or lack thereof, compared to big companies such as Apple, Samsung and LG,” said Seo. “But Asus’ after-sales service has been improved a lot recently with an increasing number of service centers, as its laptops gained popularity as of late.”

Asus also cited enhanced customer services as its strength over other brands, as well as its aggressive marketing toward corporate clients.

For education institutes, Asus offers customized services such as the designated customer service center for the Office of Education in the South Gyeongsang region. The company also runs a customer service center specialized for corporate clients.

A student uses a laptop rented by the regional education office for free at school in Namdong District, eastern Incheon. Personal computer sales in the education sector jumped sharply last year due to digital transformation accelerated by the pandemic and the resulting increase of online lectures. [YONHAP]

Demand for laptops has been soaring over the past two years, driven by the Covid-19 pandemic and the resulting acceleration of the digital transformation.

IDC Reporter found that Korea’s personal computer (PC) market including both desktops and laptops grew 13.3 percent on year in the first quarter of this year to 2.1 million units delivered. PC sales in the education sector increased 85 percent on year, households 2.1 percent, the public sector 6.3 percent and the private sector 8.8 percent.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]