LG Electronics Canada Inc. of Mississauga, Ont. is putting more resources towards growing its channel base in digital signage and in notebooks.
Shawn Snobelen, director of sales for LG Electronics Canada’s IT and Commercial Sales Division, has been trying to pack in roughly two-year’s worth of work and plans into six months so that the company can continue its growth in the digital signage market place.
LG has grown its digital signage business 20 per cent from last year, but with that success comes bigger expectations, Snobelen said.
With that he has built a channel and developed an audio-visual account base with players such as Design Electronics, Edcom and Matrix for LG’s line of digital signage products. LG Canada has also struck alliances with content creators such as Adflow, Boardsign and EK3. He has also toured four cities showcasing these displays to about 700 resellers.
LG Canada has entered into a distribution agreement with Ingram Micro Canada on digital signage, Snobelen said.
Solution providers such as SoftChoice and Metafore have also deployed LG’s large format displays through its software and networking solutions.
“This business comes from everyone and everywhere,” Snobelen said.
“You get a lot of digital signage business by default because it is growing so fast, but without the right tools and marketing you will not grow the business,” he added.
For the notebook business, LG Canada is focusing on the power users, which according to various analyst reports is about 44 per cent of the market in Canada.
According to Snobelen, LG Canada is relying on its channel partners to position its notebook line as a premium model for those users who demand a full-featured product.
LG recently hired Ipsos-Reid to conduct a study for them on the notebook market in Canada.
“What we wanted to know was who is buyer our notebooks because the feedback we get is that our products are gorgeous, but expensive,” Snobelen said.
“A lot of our customers are looking for power and reliability and a notebook that performs,” he added.
Part of LG’s strategy for its notebook line is based on IT market changing constantly. Snobelen said that power users change applications, add new software or update others.
These users also have thin and light, wireless and battery power requirements.
The challenge for Snobelen and LG channel partners are the $500 and lower notebooks that are prevalent in the market place.
“Most people’s needs change and those $500 notebooks will not be able to address those needs except if a person never changes their applications,” he said.
Currently, LG Canada has 1.1 per cent market share in notebooks and has a goal of attained five per cent market share by 2012.
To attain that goal, Snobelen is asking LG channel partners to create demand for the notebooks will maintaining average selling prices (ASP).
“You can’t survive with $300 ASPs,” he said.
Snobelen said that resellers who can’t maintain sustainable ASPs will not be able to make a profit simply by increasing volume.
For example, the notebook market grew at 20 per cent last year. If a reseller sold 100 notebooks at $1,500 per a month in 2007 that reseller would gross $150,000. With a 20 per cent increase that same reseller would sell 140 notebooks in a month, but at an average of $800 per, which would gross only $112,000 a month.
“More units costs you more money because you have to deploy more, invoice more and support more of them. Don’t be surprised when entry-level products dries up your business,” he said.
LG Canada may only have 1.1 per cent market share in notebooks in Canada, but for those buyers who upgrade their systems LG has 25 per cent market share, according to that same Ipsos-Reid study.
And, 25 per cent of customers prefer to buy from a local reseller, Ispos-Reid found.