LG To Reenter Entry-Level Smartphones Category With India-Specific Models


LG Smartphones Brand logo

In an interesting announcement yesterday, LG has announced its comeback into the low-cost entry-level smartphone market in India. The South Korean giant will reenter this extremely competitive mobile phone market by July-August this year with a couple of models.

Around the same time last year, LG and Sony, two of the highly respected names in the electronics and smartphone industry, decided to exit entry-level smartphone market in India.

They could not survive the immense competition from the Chinese players in this low margin segment. As a result, Sony’s market share dropped to 1.5% whereas LG’s market share dropped to a meagre 0.4%, as of December 2016.

HTC Plans To Exit Low-Cost Smartphone Market This Year

HTC phones are known for their aesthetics and are usually overpriced in India. As a result, it attracts only the HTC fans as they offer little incentive for anyone else to try them out especially when they are getting a better option from their brands. Owing to this, the company has decided to exit the low-cost low-margin entry-level smartphone market later this year.

HTC will continue to support the phone that are there in the market but will shift its focus to high-end high-margin devices for now. HTC did a similar thing in 2012 by launching fewer new smartphones.

Why Does LG Want To Enter The Segment That Others Are Leaving?

In simple words, LG wants to gain its lost market share by entering the sub-Rs. 10,000 smartphone market in India. This market segment contributes to 70% of the smartphone shipment in the country.

The company will now focus on designing India-specific models for catering to the local demand. This in stark contrast to its current practice of replicating global models in the Indian smartphone market.

“Normally we pursue value market share, but in the case of mobile phones in India, considering the tremendous structure, we also have to consider some volume segments which are below Rs 10,000,“ said Kim Ki Wan, MD, LG Electronics India.

This is a welcome move from LG. Who says that you can make high profits only by dealing in high margin products? The companies can also garner huge profits by selling low-margin products in high volumes. That is what LG India is planning to pursue now. Another good example of this case would be Reliance Jio.

LG is known brand in consumer durables market but so far it has failed to make a dent in the smartphone market in India.

“Our regret is that we have not developed an India-specific model, but just introduced a global platform, which has got good feedback in the US and other markets, but not in India. Just now, we’ve started to develop an India-specific platform, which I feel can change our situation,” expressed Kim Ki Wan, when asked about LG’s low market share in the country.

LG Launched LG K10 2017 @ Rs. 13,990

Yesterday, the company launched the LG K10 2017, which comes with a panic button and bears a price tag of Rs. 13,990. The phone packs a 5.3-inch HD 2.5D curved display, 1.5 GHz octa-core processor, 2 GB RAM, 16 ROM expandable up to 2 TB via microSD card, 13 MP rear and 5 MP front camera, 2800 mAh battery, and runs on Android Nougat 7.0.

You can get a phone with much better hardware, if you are interested in “just specs”, but if you are after quality and reliability then the K10 is worth checking out.

LG plans to launch a couple of smartphones by Q3 2017 within Rs. 7,500- 9,000 bracket. It would be interesting to note if LG starts offering more features in its smartphones following the Chinese players, or just stick to what it does best and offers high-quality phones without worrying about the spec sheet.

It is not going to be an easy road ahead for LG, as it has never really focused on low-cost low-margin smartphones. Moreover, in current times, LG has to face immense competition not only from its Chinese rivals, but also from Samsung.

LG also has a lot of work to do for improving its market image in India. In my experience, LG phones are equally good as those produced by Samsung, but it is the difference of consumer perception.

If LG gets its low-margin good quality smartphone formula right and market its phone appropriately, then it can gain market share without much trouble.

What are your thoughts about it? If you have ever used an LG phone, then please share your experience with us.

Source: ET

1 Comment
  1. Philips005 says

    Actually, it is very bold step of LG to produce such handsets who comes under entry level Smartphone and for those people who could not afford costly handset. This is only to compete in the entry level smartphone market.

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