System builders key to vendor&'s strategy to combat Acer, Dell
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Facing continued cutthroat price competition from rivals such as Acer and
Dell, Samsung is set to unveil a strategy to spur sales of higher-end solutions through custom-system builders.
The Irvine, Calif.-based IT products unit of the electronics giant will also seek to push the “sweet spot” of the LCD arena from the 19-inch to the 20-inch space, and will bring forth new financial incentives and technology to get the job done, company executives said.
“What you&'ll probably start to see is, within the system builder market, we&'ll start to target some of the system builders out there to put together some [tiling] solutions,” said Andy Weis, Samsung&'s marketing manager.
“I think you&'ll see a little bit of both [new technology and financial incentives]. You&'ll also see us supporting those guys to make the overall standpoint of doing business with us that much easier,” Weis said. “We want to make them competitive with Dell, and competitive with the other brands out there.”
Samsung&'s new, intense focus on the channel comes at a critical time for the company. For the most recent quarter that numbers are available—the third quarter of 2005—Samsung had dropped to fourth place in North American LCD market share, according to research firm Display Search. While Samsung saw its sales shrink by 23.5 percent during that quarter, Acer&'s jumped by 25 percent as it took over third place behind Dell and Hewlett-Packard.
Solution providers have said they believe much of the success of Acer, San Jose, Calif., and Dell, Round Rock, Texas, in LCDs is due to bloody pricing tactics. For example, as recently as last week, Dell was giving away 19-inch LCDs for free with purchases of certain models of its desktops—a practice it has used aggressively for at least much of last year.
“It&'s hard to compete with free,” said Robert Schaffer, president of Source Micro, a Randolph, N.J.-based system builder and solution provider. Schaffer said he does not currently carry Samsung systems, but said he thought that the vendor&'s strategy could prove to be a good one.
“It&'s definitely interesting, and it&'s going to fly real well with some,” Schaffer said. “We have a couple of financial brokerage institution [customers] on Wall Street. They love the multiple monitors. It&'s a good strategy.”