Samsung and its Galaxy A32 5G won big as LG left the smartphone space

A little over a year ago LG announced that it was leaving the smartphone business. It was not an entirely surprising move as the company’s mobile division had been posting heavy losses for years. Anyway, it’s it left a significant gap in the US smartphone market.especially in the prepaid device space where LG had a strong presence.

This new vacancy presented an intriguing opportunity for another Android device maker to fill the void, perhaps OnePlus, which had recently started bringing budget phones to the US, or perhaps another Chinese brand like Xiaomi could finally get a foothold in the US. USA

The obvious answer, Samsung, turned out to be no challenge. Samsung is already the second largest smartphone brand in the US, and its A-series phones have been the big winners in LG’s absence. According to Counterpoint Research, Samsung’s A-series phones contributed to its 11 percent year-over-year sales growth in the fourth quarter of 2021. It notes that the Galaxy A12 was the best-selling Android device in the US in 2021 and that the Galaxy A32 5G was a big seller at Metro by T-Mobilethe largest prepaid brand in the country.

It has not been a complete landslide; Motorola picked up some potential customers from LG and OnePlus gained a bit of traction. But the smartphone market in the US was a two-part system long before LG left the space, and it’s even more one with LG’s demise.

While we declare a winner, let’s clarify who the loser is, and it certainly is not LG. Veteran tech analyst Avi Greengart can see that, despite his feelings about covering the company’s mobile division. “It was exciting to cover them, but the bottom line is that LG’s phone division was losing hundreds of millions of dollars a year and had no clear path to profitability. LG as a conglomerate has many profitable products and product lines. The cold, hard logic of letting this loose makes sense.”

LG is doing fine. We, the people who buy smartphones and now have fewer options on our store shelves, are the ones who lose out. We have one less choice when it comes to choosing a new phone and one less reason to stray from Apple and Samsung, the dominant brands in the US smartphone market.

The Galaxy A32 5G has been one of the company’s best-selling devices in the US since its debut last year.
Photo by Allison Johnson/The Verge

What made Samsung a good candidate to fill LG’s vacancy? Strong brand recognition, for example. Jeff Moore, an analyst at Wave7 Research, says that’s especially important in prepaid. “As a general rule, if you switch to a prepaid provider, from another prepaid provider, you’ll go for the more expensive free phone. And the brand name helps a lot with that. So that provides a giant tailwind for Samsung when people switch from one carrier to another.”

Samsung was also in a good logistical position. The company already has strong relationships with US wireless carriers. Without them, it’s very difficult to sell smartphones in the US. The company also had devices ready at the right prices with no fewer than five A-series devices in your budget phone portfolio in 2021.

And then there’s the fact that Samsung’s A-series phones are just plain good. More often than not, they’re the best option at all price points below $500. Samsung has also been making major improvements on the software side. It offers the longest security support policy among Android phones sold in the US with some A-series models getting up to five years of security updates. It has also been working to get major OS version updates for older devices before. Case in point: last year’s A32 5G starts receiving Android 12 as plain new devices from other manufacturers it still ships with Android 11.

As Greengart points out, the company also has the advantage of getting paid more than once when it sells a phone. “Samsung uses its own displays, its own semiconductors in some cases, and its own memory chips. So adding volume not only affects the sale of the phone, but also the sale of the components.”

Samsung certainly had the incentives and the right pieces of the puzzle to go after LG’s vacant market share, a strategy that has paid off. counterpoint reports shows that, in Q4 2020, Samsung owned a 16 percent market share in the US. In Q4 2021, that number jumped to 22 percent. As of January 2022, the Galaxy A32 5G was the fifth best-selling phone in the US, behind four iPhone models. If anything, Samsung has underperformed thanks to problems keeping its products in stock. Counterpoint notes that, in the second quarter of 2021, “shortages, especially for A-series devices, somewhat stifled Samsung’s growth potential.”

Following LG’s departure, Motorola is now the only manufacturer to offer a budget device with a built-in stylus.
Photo by Allison Johnson/The Verge

Motorola’s gains were also significant. Before LG left the space, Motorola had around 5 percent market share in the US. After the first quarter of 2021, it jumped to around 10 percent. (Counterpoint pegs it at a 12 percent share in the fourth quarter of 2021, a big jump from 3 percent in the same period in 2020.) In particular, the Moto G Pure helped, and stands out as a very good device in the sub-$200 category. That’s been enough to propel it to No. 3 in market share, but it’s a distant third behind Samsung, lagging 10 or 20 percentage points depending on the quarter.

If Samsung and, to a lesser extent, Motorola were able to fill the void left by LG so quickly, are we really missing out on much in their absence? Both Greengart and Moore think so. Greengart also points to LG’s willingness to innovate, mentioning that the company was the first to put five cameras in a smartphone and the first to adopt the ultra-wide camera as a complement to the main rear camera. “We lose something when companies that have tried different things leave the market,” he says.

He also points out that LG phones were often discounted as well, making them an attractive Samsung alternative. “LG has always priced its phones equivalent to Samsung’s. Then they went down in price very quickly because they weren’t that good. That opened up something of a bargain: a phone that’s almost as good as Samsung for a lot less money… and [now] that phone is not available.”

LG left a bit of room for movement in the prepaid space, but overall the US is undeniably dominated by two brands: Apple and Samsung. It’s hard to imagine that changing anytime soon. Even a brand as recognizable as Google has not been able to make a dent in the duopoly. Moore cites the Pixel 6 as a case study of what happens when a challenger puts all the pieces together and really goes after some of that market share. “We got very, very low engagement numbers for Google Pixel despite having a full hype, a good, well-known brand, and availability with all carriers.” It’s hard to imagine a brand with more family recognition than Google, and yet the Pixel remains a cult favorite.

Moore sums up the entire market situation, commenting on speculation that OnePlus could make a run in the duopoly. “There was some hope that maybe they could make it a three-way game… but they’re still in the low to mid single digits, and it’s not really a game.”

Samsung didn’t capture all the market share left by LG, but it did gain enough to cement an already insurmountable lead. Game, set, match.

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