Tang Ying Chun on What LG Electronics Need To Pull Ahead

Jun 19, 2013 | News & Updates, Press, Singapore

‘Global – While it has ploughed through two years of massive losses in its mobile communications business, this year sees its quarterly smartphone sales more than double to a record high for LG, according to its first quarter earnings for this year.

In fact, LG said it aims to raise smartphone sales by more than 50% to 40 million handsets this year. According to the statement, LG attributes its showing in the handsets business to demand for its mid to low-end phones, still lagging Samsung and Apple in the premium smartphone market.

On the smartphone business, while it looks like there is much work yet to be done, the brand has made progress.

But overall, the company has found its trouble spot – its television business. LG saw its earnings shrink by one tenth of the earlier quarter from a huge fall in its TV business, negating the recovery in its mobile sales.

Home Entertainment division sank more than 80% as it had to sell televisions at lower prices and had higher marketing costs due to heightened competition, said LG. Its competitors in the TV space are Samsung Electronics, Toshiba, Sharp and Sony.

Tang Ying Chun, Manager of Strategy, Consulus, thinks that a step back out of the endless competition in the tech space and back to its roots will help.

“Despite improvements in product quality and reliability, LG can’t seem to shake off the impression of being “lower grade”, still largely known for being an OEM or parts supplier to big western brands such as Google and Apple,” said Tang.

She points out LG’s strategy so far. In April, it proclaimed it was the first to introduce concave OLED television screens

“Question is: how many people would shell out US$13,500 to buy a TV?” asked Tang.

“Being the first in the market doesn’t guarantee success. Looking at the numerous “firsts” by LG, how many have ironically paved the way for others to launch better products?

When LG started competing on features and specifications, it became sucked into this endless pissing match with everyone else,” she added.’

Read the full article at Marketing Magazine here.

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