South Korea’s Samsung Electronics Co. is re-entering the U.S. computer market from the same place the company left it back in the 1990s: Irvine.
Samsung earlier this month rolled out its Q1 device in North America, an effort led by the information technology division in Irvine, part of Ridgefield, N.J.-based Samsung Electronics America Inc.
The consumer electronics company isn’t pushing desktop or even laptop computers, but what are called ultramobile PCs.
Those are handheld devices with 7-inch screens that backers hope one day could replace other portable devices.
They’re small enough to carry in the palm of your hand and offer some of the same features as larger PCs.
Consumers are seen as early buyers. Doctors and manufacturers could be among the first businesses to adopt them.
Samsung made a foray into the U.S. computer market in 1997, when it bought AST Research Inc. in Irvine. The operation floundered and later was dissolved.
By the time of the sale to Samsung, AST already had become an also-ran in the market as Dell Inc. and Hewlett-Packard Co. came to dominate.
Samsung picked Irvine to roll out the Q1 because of the unit’s ties to businesses, including resellers of computer gear. The Irvine unit markets Samsung printers and flat-panel monitors.
“This is a nice new market niche,” David Nichols, director of product marketing at Samsung, said of Q1.
Samsung employs about 105 people in Irvine with another 35 in sales offices across the U.S. The division moved to Irvine from San Jose four years ago.
Company officials say dozens of people are working on the launch of Q1, including a team of five in the marketing department.
The Irvine division is growing on sales of monitors and printers, said John Johasky, vice president of the technology division.
Samsung doesn’t give revenue figures but said monitor sales were up 50% last year from 2004. Sales of printers and monitors should grow 20% this year, according to Johasky.
Samsung is big in computers elsewhere. Its computers are sold alongside brands such as Taiwan’s Acer Corp. and China’s Lenovo Group in Asia and Europe.
With Q1, Samsung is the first major electronics maker to offer an ultramobile PC in North America.
The number of ultramobile PCs sold could reach 1.6 million by 2010, according to Jim McGregor, an analyst with In-Stat, a division of Reed Elsevier Group PLC. Other market researchers see the devices growing more quickly, reaching 4 million units annually by 2008.
“It’s got potential,” McGregor said. “You’ll see more players come into the market in 2007.”
For all of the optimism, reviews of Q1 have been less than positive.
“Unfortunately, the Samsung Q1 is so deeply flawed in key respects that it amounts to little more than a toy for techies,” wrote Walter Mossberg, writer for the Wall Street Journal and one of the most well-read technology columnists.
Samsung officials said the reviewers were boxed in by their experiences with laptops and desktops, failing to grasp how the device is different from its predecessors.
“Most of the people reviewing this product are basing it on how they see a PC, how they see a notebook,” Nichols said.
Stores of Best Buy Co. sold out Q1 in the first day of sales, according to a recent report in MobileMagazine.
Samsung is pinning much of its hopes for Q1 on sales to businesses.
Healthcare is a big target. Doctors who like to use a desktop to enter patient information could use Q1 as they make their rounds.
“You don’t see a doctor carrying around a notebook computer,” Nichols said. “It gets a little bulky.”
Other targets include manufacturing, where people need to use a computer on the shop floor. Companies with a field sales force could use it as well.
Some things have to change, according to McGregor, including the price. Q1 sells for about $1,100. It needs to get down to less than $500. Consumers aren’t going to pay much more than that with laptops going for about that price, he said.
