Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
LG's exit from smartphone biz limits options for Korean consumers
LG Electronics' smartphones are displayed at the company's retail store in Seoul, Monday. Yonhap
By Baek Byung-yeul
By Baek Byung-yeul
LG Electronics' decision to exit from the smartphone business after 26 years is expected to increase the dominance of the two top players ― Samsung Electronics and Apple ― in Korea's smartphone market.
Samsung, which currently holds around a 70 percent market share, is expected to further strengthen its dominance ― but concerns are growing that its monopolistic status here could limit consumer options and lead to hikes in mobile phone prices.
In the bygone days of “feature” or “design-centric” phones, Korea's mobile phone market was controlled by several players including Samsung, LG, Motorola, Nokia and Pantech. But after smartphones became the norm, only three players were left vying on the local market.
In 2020, Samsung held a market share of 65 percent, followed by Apple with 20 percent and LG with 13 percent, according to data from Counterpoint Research.
Samsung grabbed a bigger slice of the pie this year as the world's largest phone maker released its latest Galaxy S21 smartphone at a more affordable price in January when speculation began that LG could withdraw from the phone business. As a result, Samsung's market share went up to 69 percent in February, while LG's portion decreased to 10 percent.
Industry analysts presume the vacancy left by LG will mostly benefit Samsung as its smartphones are operated on Google's Android operating system, which means existing LG smartphone users can adapt to them more comfortably.
“With LG exiting the mobile phone business, there will be room for price increases because only two companies ― Samsung and Apple ― will remain in the market,” an official from a local mobile carrier said.
“Chinese phone makers may emerge as an alternative to LG smartphones, but their phones haven't been an attractive choice for consumers. In the end, it will be bad for consumers as less competition will eventually result in higher prices,” the official added.
Chinese phone makers such as Huawei, Xiaomi, Oppo and Vivo have been competitive overseas, but have failed to break into the Korean market, accounting for less than a 0.1 percent share.
Only Xiaomi has managed to maintain an official sales channel here. The Chinese smartphone maker launched its latest budget smartphone, the Redmi Note 10, last month. Priced at around 300,000 won ($267), Xiaomi's move can be interpreted as a move to fill LG's spot.
Against such concerns, Rep. Yang Jung-suk of the National Assembly ICT and Broadcasting Committee, called on the government Monday to come up with consumer protection measures so that people can continue to purchase smartphones at affordable prices.
“Unless there is a new supplier, Samsung and Apple will share the market, including LG's portion, and consumers will inevitably have limited options when buying new phones. Given LG has supplied various kinds of affordable smartphones, concern exists that consumers may end up having to pay higher smartphone prices,” the lawmaker said, adding that 72.7 percent of Samsung phones sold here in 2019 were priced over 800,000 won ($712).