LG Electronics announced its first Android-based device on Monday. The announcement comes on the heels of company news about three new Windows Mobile smartphones coming to market in the next few weeks.
Dubbed the LG-GW620, the Android smartphone offers a three-inch touchscreen and a slide-out QWERTY keyboard aimed at consumers who want more flexibility with messaging. LG expects strong demand for smartphones that support social-networking functions out of the box. The phone will debut in "select European markets" in the fourth quarter, signaling that it may not see U.S. shores.
"The LG-GW620 will appeal to first-time smartphone customers by offering a new and different kind of user experience," said Dr. Skott Ahn, president and CEO of LG Electronics Mobile Communications. "Our objective is to provide a wide selection of smartphones to satisfy the diverse preferences of today's consumers. This Android phone is just one of many smartphone models we plan to introduce worldwide in the years ahead."
LG's Mixed Strategy
LG is a member of the Open Handset Alliance, so its move into Android devices comes as no surprise. But LG isn't betting exclusively -- or even predominantly -- on Android, at least for the short term. In addition to the Android model, LG recently announced it will introduce a minimum of 13 new smartphones over the next 16 months that run on Windows Mobile.
"Very much like Samsung, LG's operating-system strategy is you can't lose if you bet on every horse. LG has Windows Mobile and Symbian," said Avi Greengart, an analyst at Current Analysis. "LG is not a power in smartphones and dabbling in different operating systems is not likely to get them there, either."
But LG is clearly betting on smartphones, likely due to market research that demonstrates their rapid growth. According to the NPD Group, when it comes to mobile-phone sales in the U.S., feature phones still rule but smartphones are gaining momentum.
Decline of Feature Phones
New feature-phone sales fell five percentage points to 72 percent of new handset sales in the second quarter, while sales of new smartphones reached 28 percent of overall consumer purchases -- a 47 percent increase in the category's share since last year.
"Despite their ties to pricey data plans, the rich Internet capabilities of smartphones are attracting consumers wooed by lower device prices," according to Ross Rubin, director of industry analysis at the NPD Group.
"Feature phones are taking on more of the physical characteristics of smartphones, and often offer greater exposure to carrier services," Rubin said. "Although their user interfaces continue to improve, the depth of their applications generally lags behind those of smartphones. With the price gap between smartphones and feature phones narrowing, to remain competitive feature phones need to develop a better Web experience, drive utility via widgets, and sidestep the applications arms race."