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“In 2015, Pantech phones were eaten by the Terminal Distribution Structure Improvement Act (Simple Communication Act), and in 2021, LG phones were eaten by self-sufficiency.”
This is an evaluation made by the industry when the board of directors decided to close the mobile phone business on July 31 of this year.
LG Electronics has occupied about 10% of the domestic smartphone market, and it is said that the decline in LG phone market share accelerated as the distribution of self-sufficiency systems, which are influenced by device performance and fan spirit, became active.
If the Terminal Distribution Structure Improvement Act (Single Communication Act) enforced in January 2014 solidified the distribution structure of mobile phones centered on telecommunications companies, after the government pushed for the policy to activate the self-sufficiency system in 2018, the subscription to the communication service and the purchase of the terminal were separated. Competitiveness became a hot topic.
In addition, as the market share in the North American market fell, the market share of LG Electronics in the global smartphone market fell from 4.3% in 2014 to 2.6% in 2016, 1.7% in 2018, and 1.1% in 2020.
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The same subsidy narrows the position of Pantech, and the self-sufficiency system pushes Samsung and iPhone
An official from the manufacturer said, “The reason why LG quit the mobile phone business was that Samsung released models filled with low-priced lineups to high-priced models in the domestic market without giving any gaps. I gave it to me, but as the self-sufficiency system grew, that also decreased.” In Coupang, which ranks first in the distribution of self-contained phones, only Samsung Galaxy and Apple iPhone are handled.
He added, “Pantech disappeared due to failure to adapt to the single-tong law enforced in 2014, and LG has failed to adapt to the self-sufficiency system.” After the Dantong Act, subsidies were evenly paid through disclosure obligations and support fund caps, which means that the tight market environment was unfavorable for latecomers such as Pantech.
An official from a telecommunications company said, “In the self-sufficiency system, fan mind is really important, but LG is not a little short of it.” After the release of the online subscription plan after Corona 19, communication has become a market where you have to sign up with a mindset and compete in the self-sufficiency system with the competitiveness of the handset itself. “He said.
Only South Korean mobile phone Samsung remains… Will Motorola, Nokia, etc. come into Korea?
With the end of LG Electronics’ mobile phone business, consumer options are expected to decrease significantly.
Lee Jong-cheon, director of the National Mobile Communication Distribution Association, said, “Now there are only Samsung manufacturers in Korea,” he said. “There are Sky, Stage Five, etc., but it is only a niche because it is a folder phone or a kids phone.” He added, “The distribution network and consumers are bound to be subordinate to Samsung and Apple.”
Park Jong-il, president of Good Telecom, who acquired the Sky brand license from Pantech, said, “LG launched an LTE folder phone in the second quarter of last year, and that is why the release of Sky LTE phones has been stopped.” Said.
Communication companies are also worried. LG Electronics is reviewing the import of foreign brands such as Motorola and Nokia due to the end of the phone business, but there is also a reality that it is difficult to meet the eye level of Korean consumers, such as 5G smartphones imported last year in partnership with ZTE, a Kakao affiliate, in China. .
A news agency official said, “Stage Five, which used to be a kids phone, remodeled the ZTE phone and released a 5G phone for 900,000 won, but it was not good, and the Xiaomi phone is not becoming more popular than expected.” It is not easy to succeed if we are under review or considering the Korean people’s focus on Samsung and Apple.”