LG Electronics Co. has seen its rivals steal a march in recent quarters, dropping the South Korean vendor to the No. 5 slot globally, though it remains neck-and-neck for the No. 2 spot in the United States.
The Korean vendor has not had the success enjoyed by rivals in snatching up Motorola Inc.’s lost market share.
The vendor’s message to doubters: look to its innovations in its home market for indications of how it will “premiumize” its portfolio to profit by meeting market demands in the U.S., where it excels. That means following up its successful Chocolate handset in its top Black Label line with advanced models.
The company provided no details on upcoming launches, naturally, but media reports indicate that LG would introduce an advanced camera phone dubbed the “Viewty”-with a Google/YouTube application-at the IFA show in Berlin over the Labor Day weekend.
A touchscreen-based handset is anticipated in the U.S. market this fall, but again, LG executives aren’t talking. The company’s Prada phone, available overseas, has been frequently mentioned as a contender for the title, “iPhone killer.”
Targeting U.S. growth
The vendor’s new, high-tier phones clearly are aimed at profitability, rather than market share, but a U.S.-based LG executive-Ehtisham Rabbani, director of strategic marketing-said last week that sequential share growth in the U.S. has been “awesome.” Rabbani was hired early this year to grow the company’s U.S. share.
The slippage of LG’s global handset business at the end of last year was followed by a change of leadership. LG’s global telecom business, now led by Skott Ahn, is shopping for a global advertising agency that can help the industrial giant improve its brand identity across all products lines and markets. Meanwhile, in the States, LG is working with its carrier customers to develop products that will leverage the company’s customer segmentation findings.
“Once you identify the landscape, then you can apply strategic marketing to each consumer segment by developing handsets targeted at those segments,” Rabbani said. “Product development can take six to 12 months.”
Rabbani said that, unlike Nokia Corp. for instance, it would not trumpet its customer segmentation findings. But LG’s spadework in the U.S. is paying off in sequential growth, he said.
Data from Strategy Analytics show that the number of LG handsets shipped in the U.S. has lifted the company’s share from 15.6% in the fourth quarter of 2006 to 16.4% in the first quarter of this year and to 17.2% in the second quarter, placing it neck-and-neck with rival Samsung Electronics Co. Ltd. (Both are chasing Motorola, which despite losing four share points sequentially, still rules its home market with 33% share.)
“We’re neck-and-neck for No. 2 here across all technologies,” Rabbani said. “Our strategy is to work closely with our carrier partners on specific programs. That’s working. To a greater degree, targeted marketing and promotions are maximizing our efficiency.”
Recent announcements designed to raise LG’s brand profile have included a first-time partnership supplying mobile virtual network operator Virgin Mobile USA L.L.C. with handsets as well as news timed to coincide with Emmy Award hype that it will auction on eBay a handful of handsets signed by Hollywood stars to benefit the Motion Picture & Television Fund for retired entertainers.
Hint at future
As for the future, Rabbani said that he could provide no details on upcoming product launches. But he suggested that observers look to the variety of advanced handsets it sells into its home market of South Korea for a sense of what’s to come in the U.S.
That includes offerings in the smartphone segment, handsets with touchscreens and advanced applications such as video cameras and mobile banking. Rabbani demurred on statements about the Prada or equivalent arriving on U.S. shores.
“I look forward to talking more about pending launches,” the executive said.
“As we move to ‘premiumizing’ our consumer base”-that is, moving consumers to more expensive, upgraded handsets-we’re not walking away from our durable handsets,” Rabbani added.
In that vein, Rabbani confirmed an expected September upgrade to LG’s VX8300 at Verizon Wireless, which has been the second-hottest-selling handset here.
