One of the moves that industry watchers noted in connection with the MWC 2016 in Barcelona, Spain, was that LG decided to go toe-to-toe with their launch event against the likes of Samsung and Huawei. This is part of a new push by the company to try to regain some market position riding on the back of the LG G5 and the innovation they are bringing to market as well as a major investment in advertising. LG hopes to regain some lost spots and jump back up to the number 3 position in global smartphone market share.
The LG G5 is launching in direct competition with the new lineup from Samsung, the Galaxy S7 and Galaxy S7 Edge. Samsung is likely to post some big numbers with their devices while LG is hoping to see G5 units move to the tune of about 10 million handsets. Though modest compared to the industry giants, that would be a record number for LG when it comes to a smartphone.
LG hopes they will be helped by the positive reception the device is receiving from reviewers as well as the modular design they introduced which makes the G5 unique in the market for now. As IBB Consulting Group analyst Jefferson Wang notes, “smartphones have fully penetrated the market, it’s so hard to impress the consumer, and the G5 can do that.”
The modular nature of the LG G5 has another benefit for the company besides helping highlight the innovation of their device and attracting buyers. Accessories tend to sell for a greater profit margin, so this could enhance LG’s ability to generate some profit for their mobile division. That would be welcome news after a couple quarters of losses posted by the company.
Along with improvements to the actual product being offered, LG is also expanding their marketing efforts, a risky move given that spending could end up being more than “we could probably afford” according to LG mobile chief Juno Cho. One benefit LG could achieve from enhancing their marketing efforts is a better reception and cooperation from U.S. carriers. The investment will not only help fund bigger campaigns, carriers may see LG as helping them bring some excitement back to the market.
To help augment sales of their smartphone, LG is also making a big push into the accessories market. This includes items like the beefed up camera or audio system for the G5. LG is also releasing their own virtual reality headset, a 360-degree dedicated camera and a robot that could be used for home security and monitoring purposes.
For LG, the end result is to regain the number 3 spot in the world, a position they held in 2013. Since then they have been eclipsed by Huawei, Lenovo and Xiaomi. LG may not steal much away from those manufacturers, pulling new consumers in from struggling smartphone companies like HTC, Sony and Microsoft.