[LG Phone Withdrawal] Who Will Fill the Empty Spot... Samsung Phone Monopoly Likely to Deepen

[Asia Economy Reporter Eunmo Koo] With LG Electronics' withdrawal from the smartphone business, Samsung Electronics' dominance is expected to become even more solid.

On the 5th, as LG Electronics officially announced its exit from the smartphone business, the industry expects LG smartphone users to shift to Samsung Electronics rather than Apple in the future. According to market research firm Counterpoint Research, last year Samsung held an overwhelming 65% share of the domestic smartphone market. 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 smartphones use Google's Android OS, the same as LG Electronics. In contrast, Apple applies its own operating system, iOS. Domestic LG smartphone users, accustomed to Android, are more likely to prefer Samsung products that use the same OS rather than switching to the iPhone.

There are many concerns that Samsung's dominance will reduce consumer choice in the domestic market, 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 carriers will also decline. As Samsung holds a monopolistic position, there will be no reason to offer various subsidies to consumers to secure market share.

Samsung Galaxy S21 Series 3 Models [Image Source=Yonhap News]

However, an excessively high market share could raise monopoly and oligopoly issues, which is also a burden for Samsung. If such issues arise, the government may introduce various regulatory measures. In a report to the National Assembly's Science, Technology, Information and Broadcasting Committee in February, Minister of Science and ICT Choi Ki-young responded to concerns that Samsung's excessive market share could increase consumer burdens by stating, "We will prepare countermeasures within the scope of what is possible."

Moves by foreign companies aiming to fill LG Electronics' void are also gaining momentum. On the 23rd of last month, Chinese company Xiaomi launched the Redmi Note 10 series, a budget smartphone priced between 200,000 and 300,000 KRW, challenging the domestic market once again. This came just two weeks after its release in China and is interpreted as a strategy to actively target the space left by LG Electronics' exit.

However, it seems unlikely that Chinese products, which are not highly trusted in the domestic smartphone market?often called the "graveyard of foreign phones" except for Apple?will easily fill LG's gap. Currently, Huawei, Oppo, and Vivo do not sell smartphones domestically. Xiaomi's sales volume remains minimal.