LG a late arrival in the flagship stakes

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The LG G3 has been released after a number of hero products from rivals. Paul Withers explains why this, along with a declining smartphone market and likely aggressive pushes from Apple and Samsung, will see it fall short of its market share target this year

You have to applaud LG for its continued enthusiasm in the UK smartphone space. After all, everyone loves a challenger and we all want a competitive landscape to keep things interesting.

Towards the end of last year, its market share was hovering around the five per cent mark. The ambitions were big – spend millions on market share, raise brand awareness and release great products to get it to its target of double-digit market share by the end of this year.

At that time, going from that position to 10 per cent seemed ambitious, but after it was revealed its total market share was just 1.5 per cent midway through this year, that target now seems completely unachievable.

LG UK head of mobile Andrew Coughlin admitted to Mobile News the manufacturer has been fairly modest in the first half of this year as it has been planning the launches of its big smartphones.

The problem is most of its rivals have been fairly busy since the start of the year and have already got their flagship smartphones out to market and well established.

Coughlin identified BlackBerry and Samsung as its main targets to take market share from. At that time, according to the sales share for the three months ending October from Kantar Worldpanel ComTech, BlackBerry’s share was three per cent.

That has slid to 1.1 per cent in the three months ending May 16, but that is hardly surprising due to the Canadian firm’s inactivity in the space this year.

However, Samsung’s sales share has risen from 34 to 36.3 per cent and it has released its flagship smartphone, the Galaxy S5, two-and-a-half months before the LG G3 appeared at the end of last month. It has also accompanied this with a number of others, including the Galaxy K Zoom, with the release of the Galaxy S5 Mini imminent.

Coughlin also identified Nokia and Sony as LG’s closest rivals but they have also been busy. Nokia was bought by Microsoft for around £4 billion in April and is ready for a new lease of life with Windows Phone 8.1. It released its flagship Lumia 930 device earlier this month and has accompanied that with the Lumia 630 and 635.

Sony Mobile has also been relatively busy and launched its flagship Xperia Z2 smartphone at the start of May and Z1 Compact in January, while HTC released its flagship One (M8) in April and the One Mini 2 a month later.

LG did release the G Flex earlier this year,but in bringing a brand new concept to market with its curved screen, it was never going to make great inroads.

Going into the second half of the year and Q4 in particular, along with CCS Insight’s prediction that mobile sales will fall 11 per cent in 2014 due to a slowdown in innovation, it’s difficult to see where LG can gain significant market share from.

The iPhone 6 will likely launch towards the end of Q3 and CCS Insight chief of research Ben Wood is expecting a reaction from main rival Samsung to react with a big product launch and huge marketing spend, something LG isn’t currently demonstrating.

The G3 was only released to market a few weeks ago and could push LG’s share to three or four per cent, but LG still doesn’t have the mobile brand awareness in the UK, so it will fail to be on the tip of everyone’s lips.

A couple of other decent releases might push that up to five or six per cent before the end of the year but 10 per cent is way off target.

If LG can get halfway to that, at least it will provide it with a solid platform to build from next year.

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