How LG aims to recover lost ground

It is a make-or-break year for South Korean handset maker LG Electronics in India. As per market research firm IDC, the share of smartphones in the overall handphone market in India is expected to touch 9.3 per cent by 2016, up from 2.9 per cent during 2012, making it the fastest growing smartphone market among the emerging nations.

Sanjay Maheshwary, business head, mobile communications, LG India, says the smartphone buyer in the top 15 cities and metros will be a key segment to go for if the company wants to reach its target of becoming the No 3 smartphone vendor in country by first quarter of 2013.

As per Convergence Catalyst data, LG has less than 1 per cent share in the smartphone category in 2011, behind Nokia, Samsung, BlackBerry, HTC and Sony Ericsson.

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"Making our smartphones affordable and a distinctly different product design will be the approach this year for LG mobiles. We will have new campaigns engaging the consumer and the retailer to improve penetration," says Maheshwary.

The company recently introduced the high-end Optimus 4X HD, which sports a quad-core Nvidia Tegra 3 processor.

The company also announced the Optimus Vu, a 5-inch device in the 'phable' category to compete with Samsung's Galaxy Note, as well as the Optimus 3D Max, a phone with a 3D screen.

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Realising the need to have smartphones in the sub-Rs 10,000 category, the company is also planning to add four more devices to target the first time smartphone user.

LG is reportedly pouring some serious research and development money into its handset business and focusing on a new design philosophy called 'L-Style.'

The new L-series smartphones (L3, L5 and L7) have rectangular bodies and more intuitive placement of keys compared to the more common square-curved smartphone design.

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Priced between Rs 8,000 and Rs 35,000, the L-series is its trump card. There's no denying that LG has seen success in the design department with series like the Black Label, Chocolate and Shine.

But even as LG plans to expand its mobile market share with its Android-powered smartphones running on a fourth-generation wireless service, most analysts remain.

Analysts reason that sales could falter as Apple readies its new iPhone which could steal the spotlight from LG's new handset releases.

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Meanwhile, to ensure that it remains connected to the consumer, the handset vendor has also launched an initiative called Smartphone Idea Camp, inviting consumers to submit their unique app, feature, concept, service, design, UI ideas that they would like to see LG phones.

"The initiative began from India but will be run globally and LG experts will select top 50 ideas from across the globe. The top 10 ideas or so will be eventually incubated and included in our smartphones in the next 9-12 months," says Maheshwary.

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LG Electronics recently reported its second quarter 2012 earnings and while overall the company reported a 46 per cent increase in net profits versus the same period last year, its handset division saw a continued decrease in sales.

The mobile division reported an operating loss of $49.48 million claiming "greater marketing expenses related to new model launches in the quarter."

It, however, managed to improve smartphone sales-it was up 36 per cent from the first quarter of this year.