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When LG was developing its first phablet, known globally as the Optimus Vu but in the U.S. as the Intuition, the head of the mobile division, J.S. Park, supposedly obsessed over the slide-top mechanism that covered the charging port, sending back prototype after prototype to his designers.
One was too fast, one was too loose, and another was too slow, according to a story related by James Fishler, head of marketing for LG’s U.S. division, one he characterized as LG folklore. Park was convinced that the little detail was an important detail that consumers would focus on.
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“While it may seem trivial, that same mindset goes into all of the devices that you see LG coming out with now,” Fishler said in an interview with CNET late Wednesday.
LG believes it’s that attention to detail that has the company pulling off what so many rival handset manufacturers are desperately scrambling to achieve: a legitimate comeback.
Last week, LG said it shipped 10.3 million smartphones in the first quarter, or double the amount from a year ago. That was good enough for the company to rank No. 3 among global smartphone vendors, with a market share that rose 50 percent from the same year-earlier period, according to IDC.
But LG continues to be ignored in the U.S., where even its flagship Optimus G came and went with little attention. It’s hoping to drum up a little buzz with its larger Optimus G Pro, which AT&T will sell as an exclusive on May 10 for $199.99 and a two-year contract.
It’s official: AT&T’s new LG Optimus G Pro (pictures)
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The ninja-like rise from LG is surprising considering its relatively low-key presence in the industry. Where Samsung boasts a slick — and massive — marketing machine, Apple commands hoards of faithful fanboys, and even underdog HTC stands out with its design chops, LG really hasn’t had much of an identity to call its own. The company has a broad selection of smartphones, for sure, but none have really stood out.
Things have certainly changed over the last few months. LG started to make a bigger push behind its Optimus G flagship smartphone, which did do well globally.
But it was with its participation in Google’s Nexus program that LG started to turn some heads. The company’s Nexus 4 was the latest flagship smartphone from Google, and came with an equally attractive no-contract price of $299 at the Google Play store. The lure of the latest version of Android Jelly Bean and the low price meant the Nexus 4 was a hard item to find when it first debuted.
Still there remains a question as to whether LG can repeat its success in the U.S., where Apple and Samsung are entrenched and benefit from deeper pockets.
“More needs to be done around differentiation,” said Ross Rubin, an analyst at Reticule Research.
Strength in Europe, Asia
Even as LG faces challenges in the U.S., it is making progress in Europe and Asia Pacific.
That’s because it had — seemingly for the first time — a smartphone worth bragging about. The Optimus G, with a unique design, a speedy Qualcomm quad-core processor, and a few unique bells and whistles, sold well in select markets.
The Optimus G is a far cry from its early forays into the smartphones, particularly its early attempts at crafting the Optimus brand. Those phones were more budget-friendly devices that were stacked against some of the innovative products coming out of Apple and HTC.
“Historically, the first Optimus phone didn’t exactly ignite the market,” said Ramon Llamas, an analyst at IDC. “The Optimus G is a strong positive step.”
The Nexus 4 was another boon to LG. The smartphone, which featured Android 4.2.2, also known as Jelly Bean, was the latest flagship phone by Google, and was a hot seller late last year.
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LG Optimus G Pro for AT&T (hands-on)
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But the launch wasn’t without its wrinkles, with LG and Google dealing with supply issues that kept consumers from ordering the phone or receiving it in a timely manner.
Overall, the Nexus 4 was a positive to LG and its brand, Fishler said.
In the first quarter, LG boasted a 4.8 percent share of the global smartphone market, nudging out Huawei for third place, according to IDC. In comparison, Samsung led the field with nearly a third of the market, while Apple had 17.3 percent of the market.
Having quality products such as the Optimus G and Nexus 4 were important for building up consumer recognition, Fishler said.
“That is the first step in this resurgence of our brand around the world, and especially in mobile,” he said.
Cozying up to AT&T again
Then there’s the U.S., where LG has had a rockier time.
Late last year, LG launched the Optimus G at a low-key event, and it was one of many smartphones to launch during the holiday season for AT&T, as well as Sprint Nextel. It was inevitably crushed by the wave of consumers who snapped up iPhones and Samsung Galaxy S3 devices.
Fishler, however, defended sales of the device, saying it met the company’s expectations. That AT&T has opted to sell the Optimus G Pro is proof that it was happy with the results from the Optimus G, he added.
While Fishler and LG considered the Optimus G its flagship device during the holiday period, AT&T certainly didn’t think so. It instead pushed the bigger sellers, such as the GS3 and iPhone 5, as well as the Windows Phone-powered Nokia Lumia 920.
Roger Cheng/CNET
AT&T, for its part, believes the Optimus G Pro is in a more competitive position now than its predecessor. In the more narrow phablet category of jumbo phones, the Optimus G Pro only really competes against the Samsung Galaxy Note 2, and boasts superior screen quality and a lower price.
Jeff Howard, executive director of devices for AT&T, said the Optimus G Pro would be marketed differently, with the opportunity to show off more of its features in an interactive way at AT&T stores. He wouldn’t go into specific details but said it wouldn’t be sold like a normal phone.
The Optimus G Pro, like the similarly large Galaxy Note 2, isn’t for everybody, Howard conceded, but he had hopes that it could attract new users.
“We were surprised by the success of the (Galaxy) Note, and the Note 2 certainly kept the momentum going,” he said in an interview with CNET. “We’re hoping this expands the market further.”
Exclusivity passe?
While LG will undoubtedly get additional support because of its exclusivity agreement, the move comes as other handset vendors begin to shun the model. Instead, they’ve opted for the widest possible distribution, relying on their own brand and recognition to bolster sales.
Apple and Samsung already do it, and HTC has attempted to mimic the same strategy with the HTC One.
Sarah Tew/CNET
Fishler defended the move, although he opened the door to a wider distribution with future products.
“I think there’s room for exclusivity,” he said, but noted that getting a single smartphone across multiple carriers was “something we’re looking at.”
Either way, much of the onus will be on LG to re-establish its brand. Fishler told CNET last September that it was planning its largest TV campaign in mobile history to promote the Optimus G, but analysts say it was more a whimper than a bang.
LG needs to step it up. Fishler noted that the company was the key sponsor of the NCAA men’s basketball tournament. The company was also a key participant in the most recent episode of the Celebrity Apprentice, in which Gary Busey tried — and failed miserably — to present a pitch of LG products, including the Intuition smartphone.
(In Busey’s defense, selling the Intuition would have been a challenge for anyone; it wasn’t a particularly successful device when it debuted on Verizon last fall.)
Fishler said LG would utilize more online marketing to promote the Optimus G Pro, and advertise in “where no one else is.” He also derided the brute force marketing tactics as “foolish,” instead relying on more efficient ways to spend their marketing dollars. Samsung, in particular, has been known to spend lavishly to promote its products, to great success.
LG needs to put better use of those dollars into crafting an identity, something it ultimately still lacks in the U.S.
“What do you want your brand to be known for? It’s a question mark for me,” Llamas said.
