SAMSUNG: Shakeout Year

It was a year of the shakeout for Samsung India, and the signals came almost
at the beginning of the last fiscal. In the midst of unconfirmed reports of
financial irregulaties, the company's managing director, KS Kim, moved back to
South Korea, head of sales, Vivek Prakash, decided to quit. This was followed by
another round of top-notch casualties with Sonal Anand (deputy GM, Volume
Products), Sanjay Peer (national marketing manager, Lifestyle Products), and
Aseem Kumar (senior manager, Value Products) also leaving.

HIGHLIGHTS Product offtake hit in JFM 2005 quarter MFD Inkjet and laser printer shipment down Managed pricing pressure through slew of product launches Strong brand recall and channel network Understanding of the IT product distribution business in India Low channel confidence in the all-new team Resolving channel issues may waste time l Start-up Year: 2000 l Products & Services: Monitors, LCD displays, hard disk drives, laser printers, multifunction devices, CD-ROMs, CDRWs, DVD-ROMs, NotePC l Branches: 19 l Dealer Outlets: 7,200 l Address: 7th and 8th Floor, IFCI Tower, 61, Nehru Place, New Delhi-110019 l Tel: 251511234 l Fax: 251608818/19 l Website: www.samsungindia.com

The confusion that followed, coupled with payment problems faced by the
partners, resulted in a disastourous JFM 2005 quarter, with channel offtake of
Samsung products coming to a near standstill. The net result: its overall growth
rate dipped to 8% as compared to 22% in 2003-04, with revenues growing
marginally from Rs 1,409 crore to Rs 1,519 crore. It lost shine in the MFD
inkjet segment with total shipment going down from 10,137 in 2003-04 to 7,140.
On the laser printer front too, despite retaining its #2 slab, the total
shipment went down by almost 24%-from 45,000 to 34,247 during FY 2004-05.

Monitors continued to drive the company business bringing in 54% or Rs 814.3
crore in revenues, cornering 40% of the overall market share. HDDs brought in Rs
347 crore (23%) and ODDs closed book with a 198 crore (13%) revenue. On the TFT
LCD monitor front, the company came out with its Dali range of products in
17" and 19" categories to finally close the year with over 50% growth.
It also strengthened presence in the hard disk business leading with 52% market
share.

Samsung also managed to withstand price pressures by bringing in newer
products, including a completely new lineup of PC Monitors in 15",
17", 19" and 21" screen sizes. Samsung also came out with a slew
of notebooks-from the first 17" screen Samsung M40 Notebook PC in the
country to the world's thinnest and lightest 2 spindle NotePC (Samsung X10
plus). It forayed into color laser printers in India with the launch of its CLP
500 series of printers.

Under its new leadership-deputy MD South West Asia, R Zutshi, and general
manager for IT Business, Harry Ahn-the company is looking forward to resolving
all channel issues and strengthening its distribution network. The target for
2005-06: 30% growth.