Tablets appear to be all rage, with the Apple's iPad taking centre stage. But if Samsung's notebook sales are anything to go by, the laptop could be showing new strength in the Middle East.
Samsung, which launched the first batch of laptops across the Emirates in December 2008, is experiencing stellar Gulf sales, which increased 187 per cent in the first quarter of this year on the same period last year.
"With the exception of Bahrain, which was negative, all the countries in the GCC have shown … growth," says Raj Varma, the general manager of the notebook sales group at Samsung Gulf Electronics. "So the market seems to be growing and we are very positive on the outlook."
Compared with the fourth-quarter last year, sales jumped 40 per cent to 41,000 laptops in the Gulf region. Globally, Samsung had a record year in 2010, reporting sales of US$135 billion (Dh495.88bn) with a profit of $14.5bn.
Although the first quarter of this year was tough, the company still reported a profit of $2.6bn.
Samsung launched its latest laptop, the high-end Series 9, in the UAE 10 days ago.
Mr Varma said the Series 9 was a "showcase" of what the company could produce.
Here, he talks about the resurgence of laptop sales in the Emirates, and why he thinks they will not be knocked out by the tablet:
What type of computer do you use?
I use a laptop, of course.
Not a desktop at work?
There are people who use desktops but they don't tend to carry data or move around. They are stationary in the office. I think 90 per cent in our office use laptops. Desktops are gradually going away.
Is there still a place for the desktop personal computer?
There is still a place for the desktop because not all the companies are doing what we're doing. Some people prefer desktops because they find them more reliable and sturdy.
What do you use at home?
I live in Jumeirah with my wife and four-year-old daughter. We use a Samsung laptop. My wife is obligated to use another brand for work because she works for Emirates. But for personal use, she uses a Samsung, of course.
The Apple iPad and Samsung Galaxy tablets have been a great success in recent years. When will we see the tablet make the laptop extinct?
They'll never make them extinct; I'm confident of that. I do have a Samsung Galaxy tablet at home though, but the usage is completely different.
A tablet is a companion device; it has its own limitations. I use it for browsing, while my daughter uses it for playing games. But if you want to do some serious work, like downloading from the internet or working on Microsoft Office, I come back to my notebook. So it depends on the kind of work you are in whether you need a tablet or a notebook. Maybe tablets will take over the high end, the premium users that just need to access e-mails. But data processing, there's no way you can have a tablet do it.
What do you think of the iPad?
I have seen the iPads across the stores but I use the Galaxy and I'm quite pleased with it. For tablets, the strength is the application, so if you actually remove the application there's nothing much a tablet can offer.
But laptops do not offer applications, so surely that is a big part of the tablet's appeal?
It is just a matter of time before laptops offer apps. In the later part of the year, we are launching a laptop with an operating system that will have the same capabilities as tablets.
Will the laptop have a touch screen?
We have had products and there are those on the market now with a touch-screen interface. But it's a very limited segment. A touch-space tablet is something that is mandatory these days, but a touch-space laptop has not really caught on with consumers.
Why do you think that is?
Touch screen tablets have been in the market for some time. Usage is on the move with people who want to access data. It never really took off in netbooks or notebooks, maybe because of the cost factor and the touch was not easy to use like the tablets. We have tentative plans on such products but nothing has been confirmed. They are in the development stages.
Have tablets affected laptop sales?
Different people have different perceptions on whether the tablet has cannibalised the netbook or notebook business. When the netbook was launched, there was a great hype because of the price point, mobility and fun factor. Gradually the fear was it would cannibalise the notebooks. But time has proved that it didn't because the netbook has its limitations. The netbook is now shrinking as a category. It was about 24 to 26 per cent of the total market in the Gulf at its peak, but in the last three to four months it has gone down to 18 per cent. That may not be due to tablets because the overall market in laptops has grown.
Samsung's first-quarter growth is certainly impressive. Which retailers have been selling the most?
It's difficult to pinpoint a single retailer. But we have significant contributions from Carrefour, Sharaf DG, Jumbo and Dubai Duty Free. These are top tier-one retailers, I would say.
Has tourism fuelled that growth?
It has. Key accounts for us are Dubai Duty Free and Qatar Duty Free, where the majority of purchases are done by transit passengers. We have a lot of European customers going in for the Samsung brand. We have also extended our international warranty to India, the Philippines and other parts of Asia. Ever since then, we have seen a huge amount of Asians going for the notebooks. Right now we have 78 countries that get international warranty coverage.
Do you sell straight to the retailers here?
No, we have a distributor in every country. In the UAE, it's Eros, who is our mobile partner as well.
Does the retailer determine the price?
We fix the price from our side, and we work the costing backwards on the margins. It is completely controlled by us. Any change has to be agreed by us. It's the same in Carrefour or our branded store, unless the retailer is driving a promotion from their side. Nobody touches the price except us. We drive the price very seriously.
What about during promotional periods such as Dubai Shopping Festival? Do you have to discount then?
Unfortunately, yes, we have to accommodate all these seasonal spurts. During this time we squeeze the whole structure. The retailer gets squeezed, the distributor gets squeezed and, of course, we do, to reach an attractive price point or promotional offer.
What is the most important factor in a consumers decision when buying a laptop?
There was actually a survey done recently looking at the most important factor you consider when buying your notebook and it was performance, so speed, RAM and hard-drive. Consumers demand performance but, at the end of the day, whether they use that performance is a different question altogether. It's a psychological requirement.