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13 Jun, 2007 00:18

Asian laptop brands price out Russian producers

Russia's laptop computer producers may cease to exist, due to tough competition with Asian brands. Only Rover Computers hopes that new import regulations will make its life easier.

Large-scale laptop production in Russia began in the last ten years, as local products were a cheaper alternative to western brands.

The market grew 100 percent year on year brining huge profits to domestic producers.
The situation changed dramatically in 2004 after Asian brands, for example Acer and Asus, entered the growing Russian market with aggressive prices intended to build market share.

Rover Computers was the pioneer on the home market, assembling entry-level laptops.

Merlion followed Rover’s example and launched its own production line under iRU brand. Now iRU has already stopped producing laptops. In order to compete it needed huge investment and its shareholders decided that the project was not profitable enough. The company re-directed its activity to the desktop sector.

The sole survivor – Rover Computers – now has 10% of the market and assembles 250,000 mobile PCs per year.

The company’s management, however, is optimistic about the future.

“Nowadays the share of so-called grey imports is significant. However, new customs regulations will soon come into force. All devices will have an individual tracking number. Thus the conditions will become tougher for importers and more favourable for domestic producers. So the market structure will change,” said Konstantin Kupchik, Rover Computers Director General.

The company plans to increase its assembly capacity and almost double production over the next year.

Analysts, however, doubt that the company will be able to boost its sales due to the aggressive price policy of international vendors.