 "Taking On iPhone Could Be Too Much For LG, Nokia")
Dethroning Apple’s iPhone could prove to be too big a bite for some of the old leaders of the cellphone industry, including LG Electronics, who are only now scrambling to catch up with their phones and services. Nokia, Samsung and LG control 70 percent of the total handset market but their failure to stop Apple’s roaring march in the smartphone market has hit their profits and is now raising questions about whether it is a fight they will want to continue.
Apple which entered the handset industry only three years ago makes one iPhone for every 13 phones Nokia sells, but it generates larger total profit from these fewer phones. Following troubles of smaller vendors Motorola and Sony Ericsson, LG’s phone unit bled a record loss in the second quarter.
Smartphones account for around 20 percent of the broader handset market but the sector’s 56 percent growth rate well outpaces a 10 percent expansion of overall handset market.
TOO LATE FOR LG? At the moment, LG, the world’s No.3 handset maker, looks most vulnerable and could go down the road for restructuring as it warned that the company may report another record loss in the current quarter. LG, which has not launched any hit smartphones so far, is pinning hopes on its Optimus One, due this quarter. But it may be coming too late to the party with a mid-priced phone that likely catches up to rivals but won’t leave them in the dust.
LG’s faster-moving local rival Samsung, which has picked up Google’s Android operating system, is the frontrunner among the three to battle iPhone, but both firms have to focus on improving their services offering. “Still, Samsung and LG need to develop killer mobile services featured only for Samsung or LG which have competitive and similar points with RIM’s email and Apple’s App store,” said William Lee, Analyst, Ovum.
SAMGUNG GALAXY VS NOKIA N8 Helped by new Android-based top model Galaxy S, Samsung rose to the No. 5 position in the smartphone market in April-June following Nokia, RIM, Apple and HTC and is looking to win further share in coming months.
Analysts polled by Reuters voted 5 to 1 for Galaxy S over similarly priced Nokia N8, helped mostly by its bright 4-inch touchscreen. The N8 stands out among rivals with its 12 megapixel camera, but it has a slower processor than Galaxy S or the latest iPhone. It comes with a 3.5 inch touch screen.
“It’s a very close call, but the Galaxy S just edges it at this stage. It arguably has a slightly cooler design, some good major specs, reasonable usability, relatively acceptable pricing and plenty of downloadable apps,” said Strategy Analytics’ Neil Mawston. By sheer scale, Nokia still dominates the smartphone market with a 40 percent share, but on average its smartphones sell for less than a third of iPhone. Hit by failing new top smartphones, its shares have dropped to roughly a third from in mid-2007 when the iPhone went on sale.