CSC banks on demand for smartphones, tablets

CSC, a leading information technology chain store, is broadening its product range to include higher-margin smartphones and tablets in a drive to increase revenue and offset declining notebook sales.

The strategic move is expected to almost double its revenue from 3.4 billion baht last year to 6 billion this year before surging to 10 billion next year, said chief executive Pichai Neranartkomol.

CSC is looking to set up an office in Indochina next year to capitalise on opportunities from the launch of the Asean Economic Community in 2016.

The company also plans to list on the Stock Exchange of Thailand by 2016, said Mr Pichai.

He said the shift to emerging smartphones and tablets is expected to increase its profit margins to 300 million baht this year, up from 50 million last year.

Mr Pichai said mobile devices provide high margins of 17-20%, compared with 7-8% for notebooks.

Annual notebook sales through retail channels have remained stuck at 1.1 million units in recent years as consumers have switched to mobile devices.

"We believe notebook computers will become obsolete if makers do not make products more appealing to consumers," said Mr Pichai, adding that the company is negotiating with manufacturers to provide higher margins of 15% for notebooks to attract dealers.

CSC has a 10% share of the notebook market worth 15 billion baht.

Mr Pichai said the company is spending 110 million baht renovating and expanding its 50 outlets under a Flagship Store concept to handle more complex multimedia content and smart devices.

Wongsamat Sanpaychudayan, director for mobile of CSC, said the arrival of third-generation (3G) commercial services on the international-standard 2.1-gigahertz frequency has huge potential to stimulate handset sales, particularly the replacement market.

"The number of 2G-enabled mobile phones in Thailand is estimated at around 40 million units," he said.

Mr Wongsamat said sales of mobile phones in Thailand are expected to reach 20 million units this year, half of which will be smartphones.

"We expect to earn 3.3 billion baht in revenue from mobile sales, 70% of which will come from Samsung," he said.

Revenue from smart devices will account for up to 70% of CSC's revenue this year, up from 5% last year.

CSC aims to become No.3 in the Thai mobile retail market this year, behind Jay Mart and TG Fone.

About the author

columnist
Writer: Suchit Leesa-nguansuk
Position: Senior Reporter