The consumer durables company, LG Electronics India, is set to enter the MP3 market in India, with the launch of a player.
The product is expected to hit the market in a month or two, thus reaping the benefit of the recent reduction in customs duty on MP3 players from 15 per cent to 5 per cent.
LG, which has 17-18 per cent market share of the Rs 2,000 crore (Rs 20 billion) audio-visual equipment market, is targeting to capture 20 per cent of the market by the end of this year with the launch of 5-6 models in the MP3 player segment.
For the segment, we will have, apart from basic models, MP4 players which can play video so as to offer a complete entertainment package, said Rishi Tandon, product group head, audio division, LG.
The MP3 players will be imported from Korea and will be retailed through consumer electronics, IT and mobile handset outlets and music stores, he added.
LG mopped up around Rs 200 crore (Rs 2 billion) worth of revenues in 2005 through its audio-visual division and is expected to garner Rs 300 crore (Rs 3 billion) this year. The company spends 5 per cent of its revenue on marketing.
The country's MP3 player market, estimated at 40,000 units, is expected to grow to 2,40,000 units this year. With the recent duty reduction set to spur growth, players are lining up more product launches as in the case of Samsung, or Apple, which recently inaugurated its first exclusive retail outlet.
Tandon said that the MP3 players, apart from high resolution screens, will be better designed than conventional products.
The company is also lining up car audio product launch. "LG's strength lies in its car audio products with navigation systems. We will launch our products, including basic car audio systems, once India has an in-car navigation system in place," said Tandon.
The company's audio category has been stagnant, with only the home theatre segment growing at about 100 per cent last year. The home audio category saw a decline of 19 per cent, while the portable audio category, excluding MP3 players, slipped 25 per cent last year.
LG has offerings in the home audio segment, including home theatres and Next Gen Karaoke System. Having sold 7,000 home theatre units last year, it plans to sell 35,000- 40,000 units this year, bundling them with LCD TVs and plasma display panels.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
