[위클리 스마트] Withdrawal of LG phone will intensify concern in Korea

With the news that LG Electronics is considering withdrawal from the mobile business, there are many voices concerned that the domestic smartphone market will be reorganized into Samsung Electronics’ monopoly system.

According to the industry on the 23rd, LG Electronics’ share in the domestic smartphone market in the third quarter of last year was 9.6%.

Samsung Electronics took the unrivaled first place with 72.3% market share, while Apple only 8.9% market share.

Samsung Electronics’ market share was exceptionally high because it was in the third quarter when a new Galaxy Note was released and iPhone sales were not started, but the share of Samsung Electronics exceeded 60% annually.

Usually, Apple shares around 20% of the annual market share and LG Electronics shares 10% of the market share.

In the domestic market where Samsung Electronics smartphones are already heavily focused, if LG Electronics smartphones disappear from the consumer choice, the domestic market will be reorganized to the level of Samsung Electronics monopoly.

LG Electronics is selling mid- to low-end phones rather than premium phones in the domestic market. Consumers who used LG mid-range phones are more likely to move to Samsung Electronics, which has an already familiar Android OS (operating system), rather than the iPhone.

It is also very unlikely that significant new players will enter. This is because Chinese smartphones, which do well in the global market such as Huawei, Xiaomi, Oppo, and Vivo, do not gain trust in Korea, and their brand competitiveness is weak.

Huawei, Oppo, Vivo and others do not sell smartphones in Korea, and Xiaomi is steadily releasing domestic smartphones, but sales volume is minimal.

Assuming that Samsung Electronics takes the majority of LG Electronics’ smartphone market share, it is expected that its market share in the domestic market will reach or exceed 80%.

In this case, the consumer’s point of view is limited to two options from the existing three.

Since Samsung Electronics sells smartphones in the global market and prices are disclosed by country, it is difficult to sell its flagship products very expensive only in Korea.

However, the bargaining power of telecommunications companies is very poor in terms of handset supply and demand contracts with Samsung Electronics, and there is no motivation for Samsung Electronics to further subsidize in pricing or promotion.

If Samsung Electronics’ marketing expenses are not executed, consumers will have to buy phones more expensively.

There is nothing particularly good for Samsung Electronics.

If you take more than 80% of the domestic smartphone market share, the monopoly status becomes an issue.

When the monopoly issue arises, some point out that the government should prepare related regulations, and there may be more measures to create effective competition in the market, including the current government’s separate disclosure system.

An industry insider said, “I am concerned that the domestic telecommunication ecosystem will collapse if LG Electronics takes its hands off the smartphone. It is also regrettable that the domestic smartphone R&D ecosystem will decrease.”

Prior to this, LG Electronics said on the 20th, “Regarding the mobile business, we believe that we have reached the point where we must make the best choice by calmly judging our current and future competitiveness.” “There is.”

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