LG Takes No. 3 Spot in Smartphone Market

LG Electronics Inc. became the world’s third-largest smartphone vendor in the first quarter, but its position is far from secure.

The South Korean company shipped 10.3 million smartphones during the period, more than double the 4.9 million a year earlier, according to data from Strategy Analytics. Larger rivalsSamsung Electronics Co. and Apple Inc. continued to dominate roughly half of the global market.

Though LG showed signs of breaking away from its close competitors by snagging the No. 3 spot for the first time, holding on could prove to be a tough goal. Analysts say the battle for third place is set to intensify this year among the market’s second-tier players.

LG’s world-wide market share rose to 4.9% in the first quarter from 3.2% a year earlier. China’s Huawei Technologies Co. followed closely with 4.8%, while ZTE Corp. came in fifth with a 4.3% market share.

“There has been no clear no.3 player in the market,” Mark Newman, a senior analyst at Sanford C. Bernstein, wrote in a research note Monday.

In the first quarter, LG got a boost from its wide range of products, Mr Newman said. The South Korean company’s Optimus line of smartphones covers a broad price range from premium to low-end segments. LG is looking to its mobile business for growth, and plans to take a more aggressive approach this year on marketing spending.

“One of the critical problems of LG is that it has a very weak presence in some key emerging market countries” like China and India, from where a large part of smartphone growth is expected, Mr. Newman said.

LG is set to expand the number of its retail stores in emerging markets. Still, in China, the world’s largest smartphone market, local players like Huawei and ZTE have a competitive edge.

In higher price segments, global brands such as Japan’s Sony Corp. and Taiwan’s HTC Corp. are scrambling to stay competitive with their flagship high-end smartphones released earlier this year.

“We acknowledge [LG’s] strong recovery in handsets, but remain cautious on the sustainability of this ,” Mr. Newman wrote in his report.

Source: blogs.wsj.com

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