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Telecommunications equipment industry

South Korea's Mobile Handset Manufacturers Fall Behind Global Market Rivals

Strategic Insights

— 1 min read

South Korea's mobile handset manufacturers, Samsung and LG, are losing ground to global rivals Nokia and Motorola in the low-end market segment, where cheap products are increasingly popular. According to data from IDC, a market intelligence provider, the world's mobile phone market grew 2.1% in the second quarter of this year to 237.8 million units, but Samsung's market share slipped to 11.1% from 12.5% a year ago.

Key Takeaways:

  • Samsung Electronics' market share fell to 11.1% from 12.5% a year ago, widening the gap with Motorola, which accounted for 21.8% of the global market.
  • LG Electronics also saw its ranking drop to fifth from fourth with a 6.2% share, outperformed by Sony-Ericsson with 6.6% share.
  • Samsung and LG failed to respond to the low-priced product market, while Nokia and Motorola unveiled cheap products and raised their presence in emerging markets like China and India.
  • Samsung Electronics spent too much time focusing on the pixel war to improve camera and image quality, while Nokia and Motorola were swift in rolling out products that appealed to different customer groups.
  • Analysts suggest that Samsung and LG should reduce production costs, increase profitability, and improve market share through the original design manufacturer (ODM) business model.

Statistics:

  • 237.8 million units: the world's mobile phone market grew 2.1% in the second quarter of this year.
  • 11.1%: Samsung Electronics' market share in the second quarter of this year.
  • 12.5%: Samsung Electronics' market share in the second quarter of the previous year.
  • 21.8%: Motorola's market share in the second quarter of this year.
  • 6.2%: LG Electronics' market share in the second quarter of this year.
  • 6.6%: Sony-Ericsson's market share in the second quarter of this year.

Sources:

  • IDC, a market intelligence provider for information technology industries
  • Yonhap news agency
  • Samsung Electronics Co. (KSE:005930)
  • LG Electronics Inc. (KSE:066570)
  • Nokia Corp.
  • Motorola Inc.
  • Hyundai Securities Co.
  • Sony-Ericsson
  • Asia Pulse

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