A lack of a ‘hero’ product and slowdown in overall smartphone sales means firm will miss its target
LG’s market share has slumped by 50 per cent to just 1. 5 per cent in six months. However, the Korean vendor remains confident it can still achieve double-digit UK market share this year.
Analysts have dismissed LG’s optimism, claiming a lack of a hero product good enough to turn its fortunes around, as well as a slowdown in smartphone sales, will see the firm fall short.
They threw cold water on LG’s ambitions for this year. CCS Insight forecasts an 11 per cent fall in mobile sales in the UK to around 26 million this year, with growth in innovation slowing.
Chief of research Ben Wood said this, along with the lack of consumer draw from the G3 and an aggressive play from Samsung and Apple in Q4, will see LG fall short of its targets. “It’s going to be very tough for LG to get close to 10 per cent. We have seen a real softening of the market in the UK and consumers have less reason to upgrade. If you have a Galaxy S4 or HTC One, although the G3 is one of the best flagships out there, it really isn’t enough to draw consumers.
“There is a lot of pent-up demand for the iPhone 6 and that will be countered by a major offensive from Samsung, which will likely come in strong with new devices and a huge marketing spend. A stunning product alone is just not enough in the current UK smartphone market for LG.”
Ovum senior analyst Steven Hartley added: “I very much doubt LG will achieve its targets. The market is gearing up for a big Q4 and already Apple is apparently pre-ordering large numbers of its new iPhones. LG can gain share but these targets are a stretch.
“Unlike Samsung and Apple, it doesn’t have a hero device to capture the imagination and although the G3 is gaining traction, it’s not creating the level of hype required.”
But LG UK head of mobile Andrew Coughlin (pictured) said that despite market share falling from around three per cent at the end of 2013 to 1.5 per cent at the end of June (quoting GfK), the launch of its flagship G3 smartphone will take it towards a share of around five per cent by the end of Q3, with further Q4 releases pushing it towards its year-end target. LG’s share in the UK had peaked at 18 per cent in 2007.
The G3 (pictured) is being sold by Carphone Warehouse, O2, Three, A1 Comms, Fonehouse and Chitter Chatter, with Vodafone to follow this week. Coughlin said rising interest in the device will see its share take a “big jump”.
An advertising campaign for the device launched on July 21, and followed Coughlin’s comments in Mobile News last December that LG would spend tens of millions of pounds this year to repair its poor standing.
“Our share is nowhere near where it needs to be, but we haven’t launched many of our models yet. We’ve not even started with the G3 and are only three weeks in but already it has exceeded expectations, both in the UK and globally.
“We’re really starting to ramp up volumes in the next couple of months and this will be helped by a number of other retailers ranging the G3. There is a very good chance we can get above five per cent by the end of Q3. We have been fairly modest in the first half of the year but now that it’s out there you should start to see us achieve the share we are aiming for. Market share of 10 per cent is the dream.”
He claimed further releases across many price points will also help it achieve its targets, including the release of the G3 S in Q4, a compact version of the G3, as well as two other 4G models. Five devices will be released across its low-to-mid-end L-Series.
“We can definitely grow our share because we will be playing in many price tiers. The fourth quarter will be key because that is where a lot of volume comes.”