LG exits from the mobile business; Here's how they lost the race in the Indian smartphone market

For LG, the challenge, over a period of time, has been its inability to measure up to the competition

author_img IANS Published :  05th April 2021 01:52 PM   |   Published :   |  05th April 2021 01:52 PM
LG Electronics

LG Electronics

On Monday, LG Electronics said that it will withdraw from the mobile business after years of money-losing performance amid intensifying competition with bigger rivals. LG Electronics was once the world's third-largest handset maker and saw its feature phone business peaked some 10 years back. But LG was never a serious contender in the fastest-growing India market, industry watchers reiterated on Monday.

LG has been striving to make a turnaround in its mobile business in recent years, including launching the niche foldable smartphone called 'Wing' -- a dual-screen device with a rotating form factor but its sales were apparently disappointing.

According to Tarun Pathak, Associate Director at Counterpoint Research, LG had 0.15 per cent market share in 2019 and 0.30 per cent in 2020.

"This increased share was one-time festive season sale in 2020 but otherwise, the company's share has been stagnant at 0.15 per cent (YoY). Their success at larger consumer appliances couldn't lift the sale of mobile devices," Pathak told IANS.

LG was sandwiched between competitive entry to mid-tier offerings from Chinese brands on the one hand and Apple, Samsung, OnePlus in the premium segment on the other in the fierce India market.

"Being vertically integrated, it had access to some great technology and products, but go-to-market strategy and right portfolio is what seemed missing. LG's market share never recovered in India," Pathak stressed.

This year, LG was scheduled to launch a smartphone with a rollable OLED display after it teased the product at the Consumer Electronics Show (CES) 2021.

However, the company scrapped the plan.

"For LG, the challenge, over a period of time, has been its inability to measure up to the competition, especially in terms of matching up to their value for money propositions, and strong messaging and marketing prowess," said Prabhu Ram, Head-Industry Intelligence Group (IIG), CMR.

In addition, LG has lacked the stable chip supplies for its smartphone business.

"Yet, LG's R&D and innovation capabilities in smartphones should be applauded, especially for its thinking beyond-the-box in reinventing the rectangular slab. Unfortunately, LG's innovation prowess could not be supported with enduring market wins," Ram told IANS.

According to industry experts, from a strategic perspective, LG is positioned for long-term success in its core business areas, including consumer electronics, as well as in moonshots, such as affordable EVs, and in emerging opportunities in connected homes.

"LG's intellectual property (IP) and recent innovation capabilities could be a strong arsenal for other players in the ecosystem," Ram noted.

According to market researcher Counterpoint Research, LG was the world's ninth-largest smartphone vendor after shipping 24.7 million smartphones last year, down 13 per cent from a year earlier.

*Edited from an IANS report