LG Overtakes Apple In U.S. Smartphone Market: Is It Ready to Challenge Samsung?

By Khurram Aziz email: k.aziz@mobilenapps.com | Jan 23, 2013 10:29 PM EST

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LG may have turned around its fortunes as new data reveals that it has overtaken Apple to become the second most popular smartphone manufacturer in the U.S. 

Statistics from Counterpoint Research reveal that LG's share of the U.S. handset market in December was 13 percent or one percent more than Apple, while Samsung took the number one spot with a 33 percent slice of the market, and Motorola and HTC were fourth and fifth with nine and eight percent, respectively. 

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"LG Electronics had maintained the runner-up position until the third-quarter of 2011 but fell to third place after Apple's iPhone 4S hit the market," said Korean new site Yonhapnews, which first reported Counterpoint's figures.  
The news comes days after LG announced that its latest Optimus G handset sold over 1 million units. 

"The milestone comes roughly four months after the South Korean handset manufacturer unveiled the 4.7-inch display phone that runs on Qualcomm's Snapdragon S4 Pro processor," said Yonhapnews

However, those figures still pale in comparison to rival Samsung, which has reportedly sold over 45 million units of its flagship Galaxy S3 smartphone since it was released last may, and Apple which said it sold more than 2 million iPhone 5's in the opening weekend. 

Whether it can eventually challenge the likes of Samsung will depend on whether it can use its success in the U.S. to grow its global shares of smartphones sales, which stood at only 3.3 percent of the market in Q3 2012. 

The Financial Times says that LG originally hoped to record 1 million sales of the Optimus G by the end of 2012, but did so only on January 19. The decent U.S. market share, says the FT, should not, however, distract from the much worse performance elsewhere 

"[LG] has had the least success [in smartphones] in Asia Pacific, which is the biggest and fastest growing market worldwide", said Mark Newman, an analyst at Sanford C Bernstein, in an interview with FT

Moreover, although LG has struck up a close partnership with Google to sell the popular Nexus 4, its inability to sustain supplies has strained that relationship. 

Google's Ireland MD recently blamed LG's "scarce" and "erratic" supply as the reason for the Nexus 4 shortage, prompting a response by LG's head in France that it was Google who had underestimated the demand. Even if it could meet the supplies, the low retail price of the Nexus 4, which starts at $299 compared to Samsung's Galaxy S3, which is available for around $580 at some retailers, means bad news for LG's margins and dashes its hopes to see profits akin to Apple and Samsung. 

The company only stopped making a loss at the end of last year, but its $19.8 million profits still pale in comparison to Samsung's $4.7 billion.

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