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Monday, May 20, 2024

LG’s public image problem: It doesn’t have one

LG must feel like it’s shouting into the wind when it comes to smartphones.

The company today showed off the Optimus G, the latest Android super smartphone. The G boasts the most advanced Qualcomm Snapdragon quad-core processor, a 13-megapixel camera, and a hefty 2,100mAh battery.

The question is: will anyone care?

There lies LG’s biggest dilemma in the smartphone market. It’s not the lack of any particular feature or specification that has hurt the company, but the virtual non-presence it has had for the past few years. LG was late to the smartphone game and has continued to pay for it with minimal consumer awareness and lackluster carrier support.

“This industry changes very quickly and vendors that miss those changes do tend to fade quickly from the public eye,” said Hugues de la Vergne, an analyst at Gartner.

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It’s not like LG hasn’t tried its hardest to drum up attention for its smartphones, particularly in the brutally competitive U.S. market. But there seemingly aren’t enough parties or fancy launch events to generate any sustainable buzz for the company or its phones. From the Viper to the Revolution, its products are announced and quickly forgotten.

LG is clearly sitting in the also-ran section of handset makers, ranked seventh in the world with 3.8 percent of the global market in the second quarter, according to a Gartner study. That’s actually worse than a year ago, when it was sixth with 4.6 percent.

The brand has taken an even more dramatic hit. The LG name is on average worth roughly $391,000, down by more than half from its year-ago average value of $887,860, according to market research firm General Sentiment. The figure illustrates the drop in online discussion about the company, according to General Sentiment analyst Chelsea Morgan.

The weakness in the mobile devices business is especially glaring when considering that many of its other businesses continue to hum along. It’s either in the top position or close to that in televisions, as well as appliances such as washers and dryers and refrigerators.

Still, LG is hoping to change its fortunes with the Optimus G. James Fishler, head of marketing for LG’s U.S. operations, told CNET that the company is planning its largest TV campaign in mobile to promote the phone.

Feeling the squeeze

LG wasn’t always in this position. When the basic phone was still dominant, LG was gunning for a top position in the mobile device food chain. In the U.S., it had a particularly strong ally in Verizon Wireless with hit franchises such as its Chocolate line of phones.

But as the industry began to move to smartphones powered by the more advanced Android operating system, LG was slow to make the transition. HTC and Motorola Mobility, which bet on Android early, slipped into Verizon’s good graces, displacing LG. Motorola continues to share a tight relationship with several high-profile launches with Verizon, and enjoys significant marketing support from the carrier.

At AT&T, LG made a big bet on 3D technology with the Thrill 4G last year, but the phone and its 3D gimmick failed to resonate with consumers. While LG pushed it hard — throwing a concert featuring Jane’s Addiction — AT&T only gave it modest support.

Carrier support is a lingering issue for LG. Despite an array of smartphones, the company has largely had to generate its own awareness for its product, to mixed results. The company’s strategy has been to introduce more 4G LTE-enabled handsets to entice the carriers, but it isn’t an especially novel plan.

While LG said the Optimus G would be heading to the U.S. in the fourth quarter, it didn’t mention a carrier partner. When pressed by CNET on potential partnerships, Fischler, head of marketing for LG’s U.S. operations, would only say “stay tuned.”

Waving the flagship: A glance at the LG Optimus G (pictures)

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With so many smartphones flooding the market, carrier support is crucial to the visibility of a product. Korean rival Samsung Electronics was similarly late to the smartphone game, but tapped into its carrier relationships and pushed its Galaxy S brand, creating the powerhouse Galaxy S III smartphone, available at virtually every carrier.

In comparison, some of LG’s better phones launched overseas never make it to the U.S., or come much later. The ones that do arrive receive little attention, including the jumbo Optimus Vu, which quietly launched last week as the Intuition for Verizon, or the midrange Optimus L7, sold as the Splendor at U.S. Cellular. The Optimus G was actually unveiled a day ago in South Korea.

A few years ago, when LG finally started to make the push into smartphones, it opted not for a high-end smartphone, but for products that were affordable and targeted first-time smartphone buyers. It was a sound strategy, but one that got it little attention at a time when companies such as Motorola were making waves with their flagship products.

While LG’s decision to go the low-cost route has given it a stronger position at prepaid carriers such as MetroPCS, it increasingly faces the threat of lower cost providers such as Huawei and ZTE.

With the Optimus G, LG is figuring to get itself back into the high-end game, but is it too late?

The company is only poised to see further weakness, stuck between the Galaxy S III and Apple’s iPhone 5, both of which can be found at multiple carriers.

Recapturing the buzz

LG was a major player in the handset business, and it can be again.

The Optimus G is a nice start. It’s a phone with eye-catching power, packing all of the specs that an Android fanboy could ask for. It features Qualcomm’s first quad-core processor, allowing it to handle multiple apps on the screen simultaneously. But specs aren’t everything.

“Despite good specs, it’s very easy to get lost in the shuffle,” said Ross Rubin, an analyst for Reticule Research.

But the phone really is just a start. Just like Samsung, LG needs heavy promotion and carrier support. It needs a major player such as Verizon to back it the way it backs Motorola and its Droid franchise. LG and Verizon once had a tight relationship, and LG needs to tap into that legacy.

Fishler said he believes the Optimus G will get an adequate push appropriate to the quality of the phone.

“They will be excited about this phone,” he said.

LG will also explore “non-traditional means” of promoting the device, although he declined to get too specific. He mentioned that the event in New York, a more intimate breakfast event to show off the capabilities of the phone, represented one example of its different tact. Social would also play into the promotion, he added.

Previously, LG had a good relationship with T-Mobile USA, which carried its G2X, which turned some heads for being the first smartphone to run a dual-core processor. CNET gave it a positive review, although users were less generous.

LG, however, failed to build upon that interest level, leaving it where it is today: a company that’s starved for attention.

Corrected at 1:45 p.m. PT: LG executive James Fishler said the company is planning its largest TV campaign, as opposed to the largest seen in the industry.

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