Home Your IT Mobility LG ships 12.1 million smartphones in Q2 2013

LG has quietly been improving its products, shaving prices and positioning itself as a premium smartphone maker. It worked.

In Q2 this year it sold 12.1 million smartphones (10.3 million in Q1), a period when Samsung S4 was the must have, hot item (and sold around 20 million phones courtesy of an enormous marketing budget). These sales were not without cost. The company suffered from reduced average selling prices and higher marketing costs.

In April, iTWire reviewed the new G smartphone giving it 8.5 out of 10 stars (in fairness the S4 would rate similarly).

The new G2 will be released on 7 August. It has the potential to eclipse the S4 with a 5.2”, full HD OLED display, 2.3GHz Snapdragon 800, 13MP camera and a massive 2450 mAh battery.

Not all sales were at the premium end of the market. LG’s L and F series are doing very wel,l showing that volume comes from covering all price points (take note Apple).

The earnings report can be found here.

Opinion

No matter what company or what market segment (TV, smartphone, software, PC, tablet) recent Q2 earnings reports have universally shown a blood bath. Venerable companies like Canon and Nikon are a shadow of former stature and most, if not all the IT behemoths are experiencing reduced sales and share prices.

Simply put premium products are now too expensive for most. Value has replaced aspiration. LG has done a good job providing value but it has had to spend much more on marketing to try to attract the premium market that is in deep hibernation at present. One day people will spend again with gay abandon, but not this year or next as far as I can tell.

LG is doing better than most and seems to have the ability to react more quickly than its larger competitors can. Flexibility is the key to survival today.

LG predicts that the smartphone market in Q3 and Q4 will increase in size due to pent up demand for 4G handsets but competition for the premium market will be fierce and fought on bang-for-buck (look at Nokia's new Lumia 625, 4.7" 4G smartphone at under $400). Mass-market smartphones such as the L and F series will continue to be a matter of price.

 

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Ray Shaw

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Ray Shaw ray@im.com.au  has a passion for IT ever since building his first computer in 1980. He is a qualified journalist, hosted a consumer IT based radio program on ABC radio for 10 years, has developed world leading software for the events industry and is smart enough to no longer own a retail computer store!

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