Korean mobile device giant Samsung is pulling its Ativ laptops and Chromebooks from the European market, citing changing “market needs and demands,” which can only mean that sluggish demand, downward price pressure and hefty competition is taking its toll on the company’s PC bottom line.
The U.K.’s PC Advisor, which first reported the story, compared Samsung’s European exit to Sony’s decision to sell its unprofitable PC Vaio business last February.
Whether that’s an apt comparison or not, the move is somewhat surprising considering the growing market presence of Chromebooks but not in that Samsung has recorded a number of profit meager quarters in a row. Samsung missed analysts’ earnings estimates for its Q2 2014 and posted its third consecutive quarter of declining profit as its sales fell to $51.4 billion and its operating profit slipped to $7.1 billion. The vendor blamed a slowdown in smartphones sales amid stronger competition in the Chinese and European markets for its lackluster performance.
Samsung said that for now it’s not considering similar exits from other markets.
“We quickly adapt to market needs and demands,” said a Samsung spokesperson. “In Europe, we will be discontinuing sales of laptops including Chromebooks for now. This is specific to the region and is not necessarily reflective of conditions in other markets. We will continue to thoroughly evaluate market conditions and will make further adjustments to maintain our competitiveness in emerging PC categories.”
Samsung’ departure from the European laptop market follows Toshiba’s disclosure last week that it will cut 900 jobs from its PC business unit, or 20 percent of that operation’s staff, as part of a wide-reaching overhaul to withdraw from certain consumer markets and focus on business sales.
In February, Sony unloaded its troubled, 8-year-old Vaio PC business to investment fund Japan Industrial Partners (JIP) and four months later the brand reappeared under the newly reconstituted Vaio Corp., of which Sony retains about 5 percent ownership.
The new JIP-controlled PC entity is focused on sales of Vaio-branded, consumer and business PCs to customers in the Japanese market and has yet to expand to other geographic regions.