LG Electronics has tried but failed to hit its mark in the smartphone segment. Though they have come out with tempting phones with high-end features, their market share has simply failed to rise against the smartphone leaders.
Now, it appears the South Korean company is shifting gears as it tries a new approach. They are scrapping the LG G Series, a line that was created to offer bleeding-edge technology to consumers worldwide. Among the innovations they tried to arm these phones include flexible displays, wide-angle cameras, and high-fidelity audio. Despite those groundbreaking specs, the phone hardly held up to leading brands like Apple and Samsung.
In place of the LG G Series will reportedly be a "mass premium product." It was not defined what this meant but the term is believed to be about low-cost premium phones, Korean Times reported. Hence, LG may be aiming low-tier to the mid-range market segment and offer devices along the lines of models such as the iPhone XR, OnePlus, Huawei and Xiaomi.
The aim here is obvious - LG wants to gain some traction in a certain segment on the smartphone market. Should they be able to offer a powerful device that comes with an innovative camera and high-end display that is worth below the $500 mark, then perhaps they have a chance to finally make some noise. Failure to do so may render their efforts useless.
Looking at the US smartphone market share for the last quarter of 2020, LG is running third and far behind Apple and Samsung. They own a 12 percent market share just behind Samsung's 22 percent. Apple remains the leader, holding a huge 47 percent share per Counterpoint research.
The move aligns with a report by NDTV last November revealing that LG is looking for ways to make sure it does not fall behind their Chinese rivals. The LG smartphone business has been on a downward spiral and the company needs to do something to boost its sales and shipment figures.
Part of their plans is to expand their dependence on the Original Design Manufacturer (ODM) business model to keep their prices competitive. They have gone this route via their low-end phones. Now, they are doing the same to their mid-range offerings and hope to increase demand and revenue.
“We will use the ODM as a lever for improving the cost structure of the smartphone business. We have been making efforts to raise cost competitiveness by reducing fixed costs and optimizing production sites. We will expand the application of ODM from existing low-end smartphones to mid-range phones,” Jae-Seok Shin, Head of the Project Management Team at LG Electronics' Mobile Communications Division said via The Elec.
