[LG Phone Withdrawal] Samsung's Phone Monopoly Deepens... Fewer Choices Available

The LG Twin Towers in Yeouido, Seoul, where LG Electronics' headquarters is located, on the 2nd, as LG Electronics' exit from the smartphone business is imminent. Photo by Mun Honam munonam@

[Asia Economy Reporter Eunmo Koo] As LG Electronics officially announced its withdrawal from the smartphone business, the dominance of Samsung Electronics, the only remaining domestic smartphone manufacturer, is expected to intensify further. If even LG phones based on Android disappear from consumer choices, concerns about rising phone prices are mounting.

On the 5th, when LG Electronics announced its plan to exit the smartphone business, industry insiders predicted that LG smartphone users would likely shift to Samsung Electronics rather than Apple in the future. According to market research firm Counterpoint Research, Samsung Electronics held an overwhelming 65% share of the domestic smartphone market last year. Apple followed with 20%, and LG Electronics accounted for 13%.

The main reason Samsung is expected to absorb a large portion of LG’s market share is the operating system (OS). Currently, Samsung’s smartphones use Google’s Android OS, the same as LG Electronics. In contrast, Apple applies its own operating system, iOS. Ultimately, domestic LG smartphone users familiar with Android are more likely to prefer Samsung’s products, which use the same OS, over iPhones. As a result, Samsung Electronics is expected to solidify its dominance in the domestic smartphone market with a 70-80% market share.

Inside and outside the industry, concerns are pouring in that Samsung’s dominance will reduce consumer choice in Korea, potentially leading to higher phone prices and limited competition in services and products. In particular, negative effects on consumer welfare and market competition are inevitable. From the perspective of device supply contracts, the bargaining power of telecom companies will also decline. As the monopolistic leader, Samsung Electronics will have no reason to offer various subsidies to consumers to secure market share.

However, if Samsung’s market share becomes excessively high, the issue of monopoly and oligopoly could surface, which is also a burden for Samsung. If monopoly issues arise, the government may introduce various regulatory measures. Earlier, Minister Choi Ki-young of the Ministry of Science and ICT stated during a report to the National Assembly’s Science, Technology, Information and Broadcasting Committee in February that he would "prepare countermeasures within the possible scope" in response to concerns that Samsung’s excessive market share could increase consumer burdens.

Meanwhile, foreign companies aiming to fill LG Electronics’ void are also making moves. On the 23rd of last month, China’s Xiaomi launched the ‘Redmi Note 10’ series, an affordable smartphone priced between 200,000 and 300,000 KRW, challenging the domestic market again. This came just two weeks after its release in China and is interpreted as a strategy to aggressively target the space left by LG Electronics.

However, in the domestic smartphone market, known as the ‘graveyard of foreign phones’ except for Apple, it is unlikely that Chinese products, which lack high trust, will easily fill LG’s gap. Currently, Huawei, Oppo, and Vivo do not sell smartphones domestically. Xiaomi’s sales volume remains minimal.

This content was produced with the assistance of AI translation services.