LG Electronics announced they were officially shutting down their mobile phone production earlier this week, marking the end of an era for the Korean-based company. The closure comes on the heels of a failure to offload the struggling division, despite having several popular concepts in development. LG had previously been in talks with both Volkswagon and Vingroup, a company based out of Vietnam, to acquire their mobile assets but nothing materialized. LG says they will complete the elimination of their mobile division by July 31st but will retain core technologies developed during their time in operation. Now, with LG gone, the other Android manufacturers should step up their game, or risk getting lost in the shuffle.
Android has become a tightly polished mobile OS since its first inception back in 2008. Largely benefitting from a plethora of hardware partners, consumers have an insane amount of choices when considering an Android handset. This is one reason LG so mightily struggled to gain any traction. The Android marketplace is terribly saturated, and there is a phone available at essentially every price point. Most companies have gotten really good at producing flagship quality devices while releasing them at budget phone prices. Even then, the competition is still numerous, and it takes more than just a good price and decent design to stand out amongst the more popular smartphones on the market.
Samsung and Apple have long held a stranglehold on consumer acquisition, with both companies controlling roughly 80% of new smartphone sales combined. While Apple benefits from a fiercely loyal customer base, Samsung gets by on sheer volume. Making sure they have a phone available at every price point imaginable while ensuring their phones are able to at least minimally compete with whatever iPhone it happens to be sold alongside. This is important because Apple and their iPhone series have long been considered the measuring stick for smartphone perfection, especially here in the US. And while Samsung does a great job of making their phones look presentable alongside most iPhones, the truth is, at least most times, the iPhone would still win if comparing price in relation to phone specs.
This presents a mighty conundrum for Android manufacturers going forward. If a company like LG could fail to succeed against the big two, what needs to be done to ensure others won’t fall as well? The easy answer is simple: Be better than Samsung and Apple. The reality is not so cut and dry, however. Manufacturers will need to learn the delicate tango of building brand loyalty while maintaining BOTH attractive hardware and selling price. Look no further than Chinese manufacturer One Plus as a recent example of a company doing just that. One Plus has not only built a solid following here in the States, but they were also one of a few companies to report a growth in sales last year, in spite of the onset of COVID-19. While there’s no way of telling if they’ll repeat that success in 2021, with LG out of the way and newly announced devices headed to the market, One Plus could continue its upward trend and eventually crack the top three.
One Plus is only one company, and there’s a ton of other Android hardware partners. What about those guys? Unfortunately, LG just happened to be the first domino to fall of what I suspect will be many. The landscape is far too competitive now to not be on your A-game at all times. Fortunately for consumers, the casualty of LG will, at least in the short term, get the creative juices going and should lead to some really interesting sales strategies in the near future.