As Samsung is confirmed as the king of smartphones and reports record profits in its mobile division, LG is looking to get in on the action.
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The TV giant pledged to get tough on mobile this week, “increase smartphone revenues and market share by launching follow-up devices to Optimus G and the L-series, as well as the new F-series.”
The Optimus G II will be launched in the second half of 2013 in the US and Korea, LG confirmed during its earnings call this week, although a local spokesperson told SmartHouse the device won’t be making its way Down Under.
In terms of other new smartphone releases for Oz this year, the LG spokesperson “didn’t know” about future mobile plans locally and was giving zero away.
“Following restructuring efforts and the launch of the Optimus G smartphone model last year, LG was able to narrow the big gap it had with the leading companies in terms of technology and phone design, performance and convenience,” Yoon Bu-hyun, vice president for LG’s mobile unit, said at LG earnings call Wednesday.
The company has released some seriously kick-ass phones, such as the 4G-ready 4.7″ ‘Optimus G’ with HD display, to be sold only at Telstra from March.
But many industry watchers believe the flagship release may be too little, too late.
LG currently sells six phones here all on Android in Oz including the Optimus L9, lower end L5 & L3, and Google Nexus 4, which sold out within 22 minutes when went on sale here last year and just again yesterday, reports Ausdroid. It will now be sold at Harvey Norman from today.
It’s the competition, stupid
But with the popularity of phones from Apple and now Samsung, along with a slew of other Android players, it may prove tough to make major gains or establish differentiation.
LG mobile will also face major competition from the newly relaunched BlackBerry, HTC and as pointed out by the IDC last week, a slew of other brands like China’s Huawei and ZTE, as they look to make headway in the lucrative phone market.
Apple and Samsung, who between them own over 50% of the global market, are likely get more defensive of their dominant positions.
A local IDC spokesperson also declined to comment about LG’s but said “there have not been any new developments from LG’s side, so I think their position will remain unchanged until they launch new products.”
Plans, Plans
This week LG announced a 7% jump in mobile handset shipments to 15.4 million – more than half were smartphones – which grew 23% to 8.6 m on the back of sales of premium 4G smartphones, such as the Optimus G, Vu:2, L-series and Google Nexus 4.
Its L-Series recently surpassed the 10m milestone.
Its mobile business’ fourth quarter revenues were the highest of the year, growing 15% to $2.58 billion.
The Korean giant plans to expand its smartphone business by launching a slew of new devices on the back of expected increased demand for 4G mobiles, as more European and emerging markets introduce 4G LTE networks this year.
Telstra and Optus already have 4G networks in place, albeit limited in the case of the latter, with Vodafone to follow this year.
But for LG, its mobile operation is currently not that lucrative with just 2% profit margin compared to Samsung’s 17% for phones, as pointed out by the WSJ.
LG is still among the top 5 phone vendors globally, with 3.2% marketshare, down 36% compared to last year, according to figures from IDC. However, its smartphones are nowhere to be seen in the global Smartphone top 5.
Despite the severe supply-side issues, Nexus 4 is sure to boost LG, traditionally known as TV and home appliance brand, reputation as a major smartphone brand globally, provided it can resolve the current supply issues.
So, in other words, LG better be sure not to screw up its smartphone strategy or it could suffer a huge blow to its Mobile Communication business, as global demand for ‘dumb’ mobiles slump.
And with smartphones like all consumer technology, it all about word of mouth and mindshare. You hear about a good phone from your mate or family and then you go out and buy it. LG is starting from such small beginnings in the mobile race.
But then again, once Apple did, too.
