Cheap tablets looming threat to Samsung and LG

Deck: Samsung diversifies lineup to counter threat while LG remains skeptical of their success

By Cho Ji-hyun

The local tablet PC market is being challenged by online shopping malls selling low-priced tablet PCs to consumers here through joining hands with smaller manufacturers.
Samsung Electronics, the country’s biggest IT firm, has unveiled plans to release low-tier tablets in the first half of the year, while its rival LG Electronics has no plans to roll out another tablet PC in the first quarter.
“We’re aiming to diversify our tablet portfolio and produce low-tier tablet PCs sometime in the first half of this year as we did earlier with low-tier smartphones,” said Samsung’s mobile chief Shin Jong-kyun during his meeting with the Korean press in Barcelona, Spain, last week.
Samsung has already unveiled four different sizes of its flagship tablet PC, Galaxy Tab, in different markets, while LG only introduced one model -- the Optimus Pad LTE -- in January this year.
Earlier on Tuesday, an SK-affiliated online shopping mall called 11st Street said it sold all 500 of its 5-inch tablet PCs, priced at 129,000 won ($114), in just 11 minutes.
“We expected it to be a major sell-out but it was over and done in such a fast period,” said an official from 11st Street.
The sale was a joint effort with mid-sized firm Hansung Computer, and more than 80 percent of the buyers were in their 20s and 30s -- 51 percent in their 30s and 33 percent in their 20s -- according to officials at the online shopping mall.
“Only the early adapters were able to own the smart pads in the past considering the high cost, but now the rising demand is being served by affordable prices,” the official said.
The online shopping mall plans to put a 7-inch tablet PC on sale next Tuesday as well as a 9.7-inch tablet the week after, according to the official.
11st Street is not the only online shopping mall offering tablet PCs at cheap prices.
Auction’s 7-inch AllKill tablet PCs shifted 1,000 units priced at 269,000 won each to sell out in the first 10 minutes of sale on Monday.
G-market’s 9.7-inch and 8-inch tablet PCs were also hot selling items at the online site in late February.
“The tablets that are being sold online are eye-catching products for many, especially the younger people, since they are affordable and also run on Google’s Android mobile operating systems -- with some powered by Google’s latest Ice Cream Sandwich platform,” said an industry source.
According to a recent report published by ROA Consulting, low-priced tablets are receiving more attention in Korea with the success of Amazon Kindle in overseas markets.
The report also said the sales of low-tier tablet PCs will take off smoothly here, but the competitiveness of online shopping mall in terms of content production remains a question.
A similar debate surrounding half-priced televisions took place earlier this year with large supermarket chains, such as E-mart and Lotte Mart, releasing TVs priced at 400,000-600,000 won in the 30-inch range.
Samsung, the world’s top TV maker, said it would produce customized TVs if there was a market for it, but also said it had no plans to make any in the same price range as the supermarket chains.
(sharon@heraldcorp.com)