ITC players make new launches on a price dominated market

With one foot in the forth quarter, which is traditionally a good season, IT&C producers and retailers are making new launches to boost their chances of achieving higher sales. Business Review makes an overview of the latest products thrown on the market in the mobile phone and computer category, what are the ‘must have’ functionalities and what has changed in the consumer’s behavior.

Otilia Haraga

The overall PC market will grow by 34 percent this year, across all sectors, according to IDC. The notebook market, which represents more than 50 percent in the overall volume, will reach approximately 350.000 units. “The growth comes on the basis of companies’ needs to upgrade their systems,” Taiju Ishikawa, branch manager Sony Romania, tells Business Review.

He further explains that a very visible trend in the past years has been a permanent growth of notebooks and netbooks, while the number of purchased stationary devices such as desktops dropped significantly. “Last year was for the first time that the notebook market surpassed the desktop market and the latter is still slightly dropping year by year,” says Ishikawa. Capitalizing on this trend, Sony has just brought this autumn a new VAIO range in Romania. It is a new range of business notebooks (S and Z). The most powerful VAIO notebook that Sony launched was the new Z Series. This weighs under 1.5 kg, and it is a high end model which sells at a price of RON 15,000. “By the end of the product lifecycle (around 4 months), we expect selling about 100 units from this high end category. Overall, by the end of the year we expect to double our market share reaching 4 percent, comparing to 2 percent what we had last year,” says Ishikawa.

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This year, the most popular Sony products were the multimedia models from VAIO EA and VAIO EB series on the mainstream segment. “Also, this year we registered a small increase in our business segment that amounts for 20 percent in terms of value in the local VAIO business. The most popular model was the high end Z series and for the next quarter we expect a good reach with our new S series,” says Ishikawa.

In a consumer profile carried out by Sony, it was revealed that most clients in Romania are the “connectors” type, who can be described as: “keep me connected so I’m always in touch” and they are experience seekers. Another prevalent type of consumer is the “status seekers” who are best described as “keep me ahead of the game and help me make the right decision”. In this respect Romanians value more looks and design that neighbor countries. The third important type is the “innovation enthusiast”, users that seek latest technology and performance.

“Romanians’ tastes evolve roughly in the same way as that of people in Western Europe, only with a certain time gap,” Lucian Condruz, Sales Manager Toshiba Romania, tells Business Review. “The netbook is still being purchased as a cheaper laptop and not as the second laptop. Even if we are making the transition from desktop to laptop pretty rapidly, we are still lagging behind compared to the Western European countries. The basic laptop is the standard 15 inch one with an integrated optic unit. Features such as ultra-portability, autonomy or design still come last in the acquisition decision,” he added.

This past summer Toshiba threw 3 models on the Romanian market celebrating 25 years since the invention of the laptop. The first was a Dual Screen Tablet of 7 inches called Libretto W100, the second was AC100, a smartbook with Android operating system and last but not least, they launched a portable business laptop Portege R700.

But now Toshiba is preparing to launch a tablet of 10 inch with Android – Folio 100 operating system. “We are expecting this category of products will surpass in the future the segment of netbooks and even replace it entirely in a time span of 3-5 years. We are expecting sales of several thousand units in the first 6 months since the launch,” says Condruz.

In the mix of sales of Toshiba Romania, laptops sales represent about 60 percent, 30 percent are desktops and 10 percent netbooks. “During recession, the consumer tends, no matter the industry, to give up certain specifications or the quality of the brand in front of the price. The same happened in the laptop segment,” says Condruz. The business and lifestyle segments were affected during this period while the best sold laptops were the standard 15 inch that cost between EUR 450- EUR 600.

“The optic unit and a 15 inch screen are must-have elements. Only on the second place come a better processor, expanded memory or an expanded hard disk. On the third place there are less quantifiable elements such as the brand, the warranty and the design,” he says.

Entry level phones and smart phones polarize consumers’ preferences

Pundits in the mobile phone retail agree that the market of mobile phones continues to remain very price- sensitive. They say terminals in the entry- level range are the best sold towards all types of clients.

A slightly divergent point of view is that of Roh Pan Ock, President of LG Electronics Romania. While acknowledging the power of a low price, he says that consumers are increasingly opting for advanced technologies integrating functions that offer access to internet services, applications and social media.

“Beside advanced technologies, Romanian consumers have started to look for multimedia functions and incorporated business devices, all in one terminal. We have noticed they want a terminal which incorporates functions that one normally does not find in a regular mobile phone. Thus, we have noticed that Romanian users are attracted and increasingly appreciate smartphones,” he said.

LG launched last week the LG Optimus 7 with Windows Phone 7 operating system which entered the Vodafone portfolio and will be available at prices starting with EUR 129 (VAT included).

“Over the next period, we will focus on the segment of smartphone terminals as there are already expectations concerning this segment among consumers,” said Pan Ock.

However, it is still the special price offers which drives the demand for smart phones forward. “Lately, we have noticed a significant growth in the demand of smart phones, which was due to special offers that we have also put out there for clients,” Dobrescu Petre, Product Division Manager Orange Romania, tells Business Review.

He says that in the range of entry- level phones, Nokia and Samsung are the most successful. In the mid- range, customers would rather buy Nokia, LG and Sony Ericsson terminals while those scouring for a high-end terminal will look at Apple, BlackBerry, HTC and Samsung.

Orange also recently launched iPhone 4 in its stores.

It is closely followed by Vodafone which also announced it will have the terminal in its portfolio in a few months. The phone can also be bought via several ITC online retailers such as eMag.ro, Pcfun.ro or marketonline.ro.

Other models that recently arrived in the Orange stores were Samsung Omnia 735 (with Windows operating system) and Sony Ericsson Xperia X8 (with Android operating system).

Orange announced that in the following period the company will bring to Romania Samsung Galaxy Tab, HTC Desire HD, Nokia N8, BlackBerry Curve 3G 9300 and HTC 7 Mozart. “These phones had great success in other countries and sales have been good which makes us believe that in Romania the situation will be the same. Of these terminals, Samsung Galaxy Tab is very much expected by Romanian clients and we believe it will have great success,” said Orange officials.

COSMOTE, the third largest telecom operator on the local market, and telecom retailer Germanos will be soon launching Motorola EX115 Dual SIM device that will be available at RON 399 without subscription and at RON 1 with subscription. The operator will also bring Motorola EX128 dual SIM device for a price of RON 499 lei without subscription and at RON 1 with subscription. There will also be a new HTC in the offer, the HTC HD with Touchscreen and Android 2.2 operating system.

The touchscreen, photo camera with high resolution, Wi-Fi, internal memory, memory slot card, mp3 player and Bluetooth connectivity are still the top functionalities preferred by users. However, the decision to buy a mobile phone is influenced by the value of the handset subvention,” Alexandru Munteanu, Sales Operation Manager, COSMOTE Romania tells Business Review.

At entry level, the first best sold models are Nokia 1616, Nokia 1800 and Nokia 2330. In the best-sold mid-level range there are Samsung S5230, Nokia 6303 and LG KP502. Last but not least, in the top level the most attractive models are Samsung i9000 Galaxy S, HTC Desire and Nokia E72.

Otilia Haraga