$1.1 Billion Opportunity Opens up in South Korea with LG’s Exit

A $1.1-billion opportunity has been created in South Korea with the exit of LG from the smartphone market, according to Counterpoint Research’s latest Korea Smartphone Tracker. This calculation is based on LG’s smartphone revenue in 2019, when business was stable. LG was once the second-largest player in the market.

Samsung is trying to benefit from LG’s exit as it has a wide range of low- to mid-priced Android models. Apple is also upping its game to increase share, although the absence of feature-enabling credit card payments via iPhones in South Korea may act as a barrier in addition to the general tendency of Android-based mobile users to stick to Android models. Xiaomi started to get aggressive in South Korea’s low- to mid-end segments with the Redmi Note 10 launch. However, it does not seem easy for the company to take a significant share here as the consumers have a low preference for Chinese brands.

The South Korean smartphone market itself contracted 8% YoY and 17% QoQ in the second quarter of 2021, lacking momentum from the top two dominant players, Samsung and Apple. Both did not have any new flagships during the period. The Galaxy A52 and A72 were not released due to chip shortages, contrary to the company’s original plan. Further, unlike last year, Apple did not release the iPhone SE series either, while the new product effect of the iPhone 12 diminished with the approaching launch of the iPhone 13.

“A strong recovery of the South Korean smartphone market is expected on the back of new launches in the second half. Samsung will likely take the majority of LG’s domestic market share, but it is worth paying attention to overseas brands’ entry, such as Google and Motorola. Their brand awareness is good among Korean consumers, but the key is whether they fully understand the country’s smartphone market and consumer preferences. It will be important for them to benchmark the past effective strategies of LG, including its target price segments and sales channels, to absorb LG’s smartphone users. With this potential competition, we could expect a more diversified competitive landscape of the South Korean smartphone market than before,“ said Liz Lee, senior analyst at Counterpoint Research.