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LG (SEO: 066570) is the third largest handset maker worldwide, but it is falling behind rivals as it fails to keep up with the pace of smart…

LG Twin Towers
photo: LG

LG (SEO: 066570) is the third largest handset maker worldwide, but it is falling behind rivals as it fails to keep up with the pace of smartphone innovation. In the second quarter, LG marketshare dropped to 9 percent from 10.7 percent in the year-ago period, despite focusing on the high-volume, yet low-end part of the market. Worse yet, Gartner said LG’s average selling price per device fell 27.8 percent. But the South Korean giant is determined to do something about it, and plans to launch 10 more smartphones and a tablet by the end of the year, reports the WSJ.

The first LG tablet will run on Google’s Android OS and will be released under the company’s Optimus line. The defining feature will be the tablet’s ability to help create content rather than simply display it, Chang Ma, VP of marketing for LG’s mobile-devices told the WSJ.

Apple’s iPad is often criticized for not being useful enough. While it’s good for reading books or magazines and surfing the internet, it’s not great for responding to e-mail, creating documents or tweaking PowerPoint presentations. And since it can’t replace the laptop, most business travelers say they leave it at home. No word on whether the tablet would be released through a carrier; however, Ma did say the U.S. would be a key market, and was comfortable making this bold statement: “Our tablet will be better than the iPad.”

As for the company’s smartphone strategy, it plans to start off slowly by making low-end devices that first-time smartphone adopters would be comfortable using. That means, the hardware specs could be unimpressive, but that will change over time, too. LG plans to follow-up with aggressive roll-outs with 4G phones, using LTE, next year.

LG might have starting falling behind in the smartphone race when it placed its bets on Microsoft’s Windows Mobile. Early last year, Microsoft (NSDQ: MSFT) said LG was committing to developing 50 new Windows Mobile phones by the end of 2012 and both companies — Microsoft and LG — were increasing their investment in Windows Mobile five-fold. However, later that year, LG hedged its bets and launched its first Android-based phone, and those dozens of Windows Mobile phones became nearly non-existent.

At CTIA earlier this year, we noticed that LG didn’t have even one Windows Mobile phone on display at its booth, although LG still remains one of Microsoft’s launch partners for the new platform coming out later this year.

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  1. Hopefully LG will be able to put out a competent tablet device to counter Apple’s iPad.

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