Too much of a good thing

15 Aug 2006

Korean handset makers Samsung and LG Electronics are reportedly losing their respective bids for world handset domination as their overseas market shares decline. The latest figures from IDC show Samsung's Q2 market share slipping from 12.5% to 11.1%, and while LG's share crawled up a fifth of a percentage point to 6.4%, Sony Ericsson ended Q2 ahead of LG at 6.6%.
Samsung and LG have chalked up the trend to exchange rates and a focus on top-end handsets, but a report from LG Economic Research Institute suggests the real problem maybe focusing too much on features and not enough on the people who use them.

The report said that consumers are more interested in 'emotional' phone characteristics like brand, design and feel, whereas Korean handset firms are preoccupied with adding new functions.

The institute also suggests that there is such a thing as having too many handsets to choose from, with Samsung and LG Electronics producing from 90 to 110 different models last year (compared to 60 and 70 from Nokia and Motorola, respectively). That means sinking more money into development, distribution, and marketing.

'Makers should cut down on costs by focusing on a making a 'staple' model,' says LG researcher Park Jae-beom, according to the JoongAng Daily. 'Companies also have to create a monitoring system for global consumer trends and needs. If they only focus on Korean consumers, they may lose the big picture.'

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