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 Eager to capitalize on strong early reception for its G3, the
company on Friday said it will sell the device through online
shopping site JD.com, China's second-biggest e-commerce company by
market share, at 3,999 yuan ($650).
While that is cheaper than its 899,800 won ($869) launch price at
home in South Korea in late May, it is more than twice as expensive
as feature-rich phones offered by local players led by Xiaomi Inc
that have battered the likes of global No.1 Samsung Electronics Co
Ltd in China.
LG ranked fifth in global smartphone sales in the second quarter,
according to IDC, but does not crack top 10 lists in China, the
world's biggest smartphone market.
It could struggle to pick up meaningful early market share as it
won't have local carriers pushing the device. Apple, by comparison,
inked a long-awaited distribution tie-up in December with China
Mobile, the world's biggest carrier.
An LG spokeswoman said the firm opted to go only with JD.Com for now
to cut distribution costs, noting that non-carrier vendors account
for more than half of handset sales in China.
The G3 has won praise as a major improvement on its predecessor.
Sporting a high-resolution 5.5-inch screen and features like laser
focus for the camera, LG has said reception for the device has been
better than anticipated.
Tom Kang, an analyst with Counterpoint in Seoul, said the new LG
phone's high quality display, which has nearly twice the resolution
as that of Samsung's flagship Galaxy S5, will be an attraction for
Chinese buyers, but the absence of carrier subsidies and
distribution will be a challenge.
"No one really orders a BMW over the internet even though there's a
price discount. You want to go into the shop, touch it, feel it," he
said.
Upstart Chinese manufacturer Xiaomi usurped Samsung to became the
No.1 China player during the second quarter, according to Canalys.
Samsung and Apple Inc were the only foreign firms to rank in the top
10 in the period, as local brands increasingly pack on features but
cost less.
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LG's handset division turned a quarterly profit in April-June for
the first time in a year after shipping a record 14.5 million
smartphones, and the company is counting on the G3 to keep the
momentum going.
LG has said it aims to ship more than 10 million units of the G3,
without setting a target date, and analysts expect the company to
hit that with relative ease. Several predicted LG will ship 3
million G3s in the third quarter.
Still, those numbers are small compared with the 108.5 million
smartphones that Canalys says shipped in China in the second
quarter. And with Apple expected to unveil its larger-screen iPhone
6 and Samsung likely to launch its next flagship Note device in
September, LG faces an uphill challenge.
(1 US dollar = 6.1568 Chinese yuan)
(1 US dollar = 1,035.2000 Korean won)
(Editing by Tony Munroe and Ryan Woo)
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