LG declares 'niche player' in mobile

LG Electronics’ mobile devices chief Cho Juno talks to Korean media about the company’s business strategies on the sidelines of this year’s Mobile World Congress in Barcelona, Spain, last week . / Courtesy of LG Electronics

By Kim Yoo-chul

BARCELONA, Spain ― LG Electronics has adopted a new business strategy in the mobile arena as the LG Group’s technology affiliate wants to become a “niche-player” in the handset market.

“What LG Electronics should do is release unique and appealing products to help consumers widen their choice in a market led by Samsung and Apple,” LG’s mobile devices chief Cho Juno said last week on the sidelines of this year’s mobile expo, Barcelona, Spain.

The remarks were seen as a move not to directly compete with Samsung by shipment volume but to create more “LG fanboys.”

“LG’s branding strategy isn’t to seek for volume growth but to have more LG fans for brand loyalty,” Cho said.

While Samsung’s Galaxy S7 made little surface changes to its predecessor ― Galaxy S6 ― the LG G5 has adopted a modular-type detachable design in what LG officials say is part of the company strategy for alliances with third-party developers and device manufacturers.

According to the executive, its transition was due to the lukewarm response of its G4 smartphone.

“The G4 failed to make a real difference. I think LG Electronics can’t compete with existing leaders, effectively, with the same marketing plan. Appealing hardware specifications won’t work for LG,” Cho said.

LG was the leader in an era of feature phones, devices with sleek and appealing design; however, it was late in entering the smartphone business, costing the company a lot. Now, due to the rise of cheap Chinese manufacturers, LG’s global position in the smartphone industry is out of the “top 5.”

Cho didn’t mention about the sales target for the G5; rather, he said LG will invest more to put third-party developers into its own ecosystem.

The LG G5 is able to connect to a lot of external devices. Cho said it will release “new friends” and offer competition programs for application developers. The G5 will be available from late March.

Unlike LG, Samsung Electronics showed its confidence to lead over rivals in the competition for volume growth ― the Galaxy S7 has enhanced camera and display functions. With the collaboration of Facebook, Samsung plans to recover its share in China, the world’s biggest smarpthone market, which was taken by Chinese rivals such as Xiaomi.

Samsung’s mobile chief Ko Dong-jin said the initial response to the Galaxy S7 “was good,” adding that sales will be far better than those of the S6.

“It will be interesting to see if LG’s strategy to become a niche player works. It seems smart given LG’s status ― being unable to grow its smartphone business as it did before,” said an official.