Unlike its local rival Samsung, the Korean handset maker LG (SEO: 066570) has lately had more of a mixed bag when it’s come to Android devices and its mobile growth. Now it’s looking for Mr Right: a partner to help it grow and remain competitive in an ever-crowded market.
Figures for Q3 from Gartner note that LG is still the world’s third-biggest phone maker overall, which includes not just smartphones but also lower-end feature phone devices. But its share is in decline. In the quarter it sold 4.8 percent of all mobile handsets worldwide, compared to 6.6 percent for the same quarter a year before. That means Apple (NSDQ: AAPL), which grew its market share to 3.9 percent from 3.2 percent in the same period, is inching up closer. And since Apple is doing that with a higher-priced, smartphone-only lineup, it’s likely making far better returns on those sales than LG.
In smartphones, LG is doing better than some of the many Android-based makers out there, but it’s also doing worse than others. LG’s name doesn’t make Strategy Analytics’ list for the top vendors in that same quarter, falling instead into “others” (the top three, they say, are Samsung, Apple, and Nokia (NYSE: NOK), in that order).
In smartphone figures that analysts NPD released directly to journalists (so no link) earlier this week, it said that only one LG device, the LG Revere, made the top-10 sales rankings for October and November. It was at number-10, while Apple took the top-three slots and Samsung the next two.
LG has seen a few high-profile management changes in its mobile division, and has raised some $1 billion in the markets, to try to turn things around, while at the same time showing commitment to the business. And it is also going for another route to change: a partnership.
And it is looking high and low for Mr Right: “We’re looking into almost every alliance that the mobile industry can think of,” the chief executive of LG’s mobile business, Park Jong-seok, told Reuters. He further said that some of those talks are “quite active.”
Partnerships in the mobile industry are certainly nothing new.
Some, like the now-concluding alliance between Sony (NYSE: SNE) and Ericsson (NSDQ: ERIC), demonstrate how hard it can be to make them work. Others, like Nokia and Microsoft (NSDQ: MSFT), or Google (NSDQ: GOOG) and Motorola (NYSE: MMI) (if regulators approve it, and neither side backs out), still need to play out before we can say whether they were a wrong move or not. One thing for sure is that one company that was integrated from the word go, Apple, is doing something very right, and others are trying to follow in its mold.
That kind of vertical integration could give us a clue as to what kind of company LG has in mind when Park says “alliance” — but with all other eligible platforms otherwise engaged, it makes LG’s position a little more challenging.
As with other companies, like Dell, which are looking to renew their attack on the mobile market, another area that LG will need to consider is content, and the ecosystem that will exist on their devices. With many of the world’s big media brands very far from the vertical integration question where mobile is concerned, but still harboring ideas of what they could do if they had it (think Facebook here), that could be more fertile ground. Life may be Good for LG, but it can definitely be so much better.