제 10 호 The Only Mobile Phone Company in Korea: Samsung
Kicker: OPINION (MOBILE PHONES)
The Only Mobile Phone Company in Korea: Samsung
by Yoo-Jung Kim, Editor-In-Chief/ Eun-Jea Choi, Reporter
kyjmimi121@naver.com/Welvoeeun123@naver.com
LG Electronics recently closed its mobile phone business. In 1990, the company closed its first mobile phone business 26 years after entering the market. LG's business ended with a bad result of accumulated deficit of 5 trillion won for its mobile phone business. There are many reasons why LG's mobile phone business failed. Among many reasons, LG is trying to focus on the reason why it failed to meet the needs of the MZ generation. Let's find out the types and functions of mobile phones favored by the MZ generation and the trends of the mobile market through the strongest Samsung in mobile phone business.
History of the LG Smart Phone Business
The early LG mobile phone market ranked third in the world market. LG was booming in the mobile phone market from 1995 to 2014. In particular, the G3 model sold 10 million units in 2014. Unfortunately, there has been a deficit since 2015. There are various reasons for LG Smartphone's business failure and deficit.
Causes of Failure in the LG Smart Phone Business
The first reason is that the success of feature phones has slowed the development of smartphone markets. Other companies started their smartphone business early in the period when they were successful as feature phones. Many experts say that LG chose to enjoy the success of the feature phone a little more than to move quickly in the times.
The second reason is that LG missed the consumers’ needs due to our tenacity to unique models. LG has been trying various types of fresh products such as modular Smartphone G5 and dual-screen Smartphone. In this regard, it has helped develop Korean smartphone technology, but it has been shown that it was far from consumers. Many say that LG's attempts have undermined its competitiveness in the smartphone market. Lastly, LG has fallen behind in competition for preference of Smartphones from consumers. Homogeneity has a big impact in Korea. As more consumers from Samsung and Apple among the majority of consumers, LG mobile phone consumers continued to be shaken. In fact, LG accounted for 5% of the smartphone brand preference of people in their 20s, which includes many students from Sangmyung University and affects the smartphone business.
<2019 Smartphone Brand Preference Survey Results>
Results from the Stop of the LG Smart Phone Business
There are a lot of things affected by the stop of LG's mobile phone business. First of all, some 3,700 smartphone workers related to LG's mobile phone business were moved to other headquarters*, and office workers are expected to be relocated before July 31st, when the business will end. In addition to employees, the impact on consumers is also a very large part. Although it will stop its business, it said that AS service will continue for 4 years. However, it can be difficult to get related mobile phone parts, and the price of a second-hand* phone can drop significantly or make it difficult to sell, and thiscan have a negative affect on consumers. On the other hand, there are parts that have a good influence. The stock market is taking a very positive stance because it can shake off losses in LG's mobile phone business and increase profits. These advantages also exist for competitors because Samsung and Apple do not have to be competitive and can reduce the benefits they originally gave to consumers.
<LG Electronics Stock Price Rise Graph>
*headquarer: an organization are its main offices.
*second-hand: things are not new and have been owned by someone else.
Samsung's Monopoly Era?
Experts estimate that the monopoly* of Samsung's mobile phone era will begin. This is because existing LG cell phone users are likely to move on to Samsung phones with the most similar smart phone structure and are not expected to change to the Apple system because they are domestic brands. However, it is difficult to conclude because the younger generation uses Apple's iPhone a lot. However, many speculate that Samsung's era in the mobile industry will open as Samsung Electronics has recently been rapidly absorbing LG Electronics' loyal customers and Samsung Electronics is launching a large-scale used phone compensation program. According to the mobile telecommunications industry, about 80% of LG Electronics' V50 used phone price guarantee program subscribers chose the latest Galaxy smartphone, and Samsung's share in the domestic mobile market stood at 65% and 13% last year. In response, LG is planning to focus on future businesses such as automobiles and robots, as mobile workers are the core of developing 6G mobile telecommunication and cameras.
<Share of Smartphone markets in South Korea in 2020>
*monopoly: If a company, person, or state has a monopoly on something such as an industry, they have complete control over it, so that it is impossible for others to become involved in it.
The shutting down of LG's mobile phone business does not just mean the end of the business. As mentioned before, it can have a big impact among consumers and various businesses and people, and it is a part where we can look forward to the future business trends that LG Electronics is pursuing in the future. Due to the U.S.-China trade dispute, the smartphone competition between Apple and Samsung, excluding Huawei, will be overheated, and people's choices are also unpredictable. Therefore, for the development of domestic companies, the psychology and preferences of mobile phone consumers should be well understood, and companies should develop various future businesses as well as mobile businesses to actively realize the domestic industry.
