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Company is first Android tablet maker to call it quits post-Surface, will "focus on smartphones"

Finally profitable South Korean gadget-maker LG Electronics Inc. (KSC:066570) was eyeing a deeper charge into the tablet market.  But in the wake of Microsoft Corp.'s (MSFTannouncement of the "Surface", a 10.6-inch super-slick Windows 8 tablet, LG decided the time was not right for deeper market penetration.

I. Bye Bye Tablet Market, Says LG


Ken Hong, a spokesman for Seoul-based LG, commented in an email to Bloomberg, "We’ve decided to put all new tablet development on the back burner for the time being in order to focus on smartphones."

LG currently has a minimal presence in the tablet market -- the market for large touch-screen devices that tread the line between a smartphone and a traditional personal computer.  Last March LG launched its first tablet, the Optimus Pad, which was marketed as the "G-Slate" on Deutsche Telekom's (ETR:DTE) T-Mobile USA network.  That dual-core Honeycomb tablet was followed up on by the announcement of the Optimus Pad LTE earlier this year, but that tablet has yet to ship.
Optimus Pad LTE
The Optimus Pad LTE will likely be LG's last tablet for now. [Image Source: LG]

The tablet market is expected to reach $78.7B USD this year, but Android tablet makers like LG have struggled against market leader Apple, Inc. (AAPL).  So far the company that has made the most progress is Amazon.com, Inc. (AMZN) whose $200 USD Kindle Fire runs a branched variant of Android that Amazon designs in-house.

The big problem facing the Android pack is price.  None of them can match Amazon's attractive $200 price.  For example the G-Slate debuted at $529 USD, before eventually falling to $399 -- twice the price of a Kindle Fire.  Those prices put it in the same ballpark as Apple's iPad, which starts at $499.  But thus far Android tablet makers have failed to convince tablet consumers that their product is worth as much as an iPad.

Microsoft's arrival on the scene has sent further waves of fear through the huddled ranks of Android manufacturers.  While its tablets will likely be priced at higher than an iPad (one estimate we've been hearing is $900 USD for the Intel Corp. (INTCIvy Bridge model), they pack a full-fledged PC-operating system and a keyboard that looks far nicer than bare-bones wired and wireless keyboards for Android tablets.

They also have a colorful and striking design flare that easily outshines the more demure Android designs like the G-Slate, a substantive design that arguably outdoes Apple at its own game.

In short, it's increasingly looking like Apple and Microsoft will dominate the high-end, while quasi-Android tablet-maker Amazon will sweep up on the low end.  The rest of Windows 8 and Android third party crowd are left with a less certain fate trying to sell less-distinctive devices at middle-of-the-road price points.

II. Company Faces Challenges in the Smartphone Sector

LG's focus on its phone offerings is needed.  Apple recently passed it in unit sales, a testament to the twilight of the feature phone -- a market that LG long performed well in.  That's not necessarily bad news for LG.  It's turning a profit, and smartphone can be a much higher margin business than feature phones.  

But competition is very fierce in the smartphone market right now.  Windows Phone maker Nokia Oyj. (HEX:NOK1V) has started to gain ground.  Apple continues to accelerate its iPhone sales.  And Samsung Electronics Comp., Ltd. (KSC:005930) has consolidated its market share into a world-leading Android smartphone empire.  With LG positioned similarly to other scrappy challengers like HTC Corp. (TPE:2498) the demand to execute in terms of product launches has never been higher for the electronics firm.

LG Optimus Vu
LG's Optimus Vu is an impressive 5-inch Android smartphone. [Image Source: LG]

LG's Optimus line has started to gain some brand recognition in the U.S.  But it has a long ways to go before it becomes as well known as, say, Samsung's Galaxy line of smartphones.

Source: Bloomberg



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Response from public
By dagamer34 on 6/19/2012 1:36:55 PM , Rating: 5
Here's how the public will respond: "LG made tablets?"




RE: Response from public
By kleinma on 6/19/2012 1:44:16 PM , Rating: 4
LG used to make decent phones in the feature phone day, but I have not been impressed with their smartphones, tablets, or other devices.

LG might have the tagline of "Life's Good", but that is because no one would buy products from a company called "Lucky Goldstar" as it sounds like some cheaply made asian crap being churned out in sweatshop factories.

I bought an LG branded dehumidifier and the thing died on me just over a year. The replacement one I have is a GE that my parents gave me when they moved, which is 20 years old and still going strong.

LG wants you to think it is a high end company, but the reality is that it is a cheap crap electronics company.


RE: Response from public
By cknobman on 6/19/2012 2:24:37 PM , Rating: 2
Every single phone I have ever bought by LG has turned out to be sh!t.

That includes 1 android smartphone and 3 feature phones.

Response from me "Good, stop making other sh!t mobile products while your at it!".


RE: Response from public
By JasonMick (blog) on 6/19/2012 3:06:49 PM , Rating: 3
quote:
Every single phone I have ever bought by LG has turned out to be sh!t.

That includes 1 android smartphone and 3 feature phones.
I take it you like pain??

Weren't the first two awful phones enough?

Or did you hold out hope that a company originally named "Lucky-Goldstar" would suddenly produce terrific product?

;)

Honestly, though I hope LG does well in the phone market. More competition means more options and more new features -- which is a win no matter what platform you choose.


RE: Response from public
By cknobman on 6/19/2012 3:52:52 PM , Rating: 2
LOL

Actually I spent an entire upgrade cycle for my family of 4 on LG phones and it was a huge mistake.

2 of the 3 feature phones had random shutdown problems and the other had a problem with its ringer.

The Android phone was a optimus s and it has had a whole history of problems since day 1 (mostly software and firmware issues).


RE: Response from public
By chmilz on 6/19/2012 4:43:33 PM , Rating: 2
Bought a newer home Fall 2011. Previous owners installed upper-end LG appliances late 2009. Complete garbage. As soon as I have $5000 kicking around I'm replacing them all, except for the dishwasher - that piece will be dragged out back and receive the Office Space treatment.


RE: Response from public
By boobo on 6/19/2012 4:48:49 PM , Rating: 3
GE from 20 years ago != GE made today.


RE: Response from public
By Flunk on 6/19/2012 4:51:58 PM , Rating: 2
The only LG Phone I ever had was an LG Neon feature phone that loved to turn itself off when you slid the keyboard in (slider phone). This made it almost totally unusable. It also got terrible reception, the interface was poor and the build quality was suspect.

So, not all their feature phones were decent. My HTC HD7 that I'm using now is as solid as a rock and has never crashed on me. I would buy another HTC, another LG? No.


RE: Response from public
By TSS on 6/19/2012 6:40:43 PM , Rating: 2
That's not completly fair. Each company has it's own thing they're good at, and having something i'd call a general electronic device like a dehumidifier from a company called general electric... yeah.

I have an LG dumbphone, still goes strong after i've had it nearly a decade (i'm not so much into smartphones), with the battery still lasting multiple days on idle. The only thing that's "wrong" with it is that it's one of those flip open phones, and the flip resistance is completly gone. Otherwise it's survived a decade of falls, accidents and general use just fine.

Also have 3 LG screens which all work just great. One is a 56" HDTV, a normal 23" computer monitor and a 23" 3D monitor. The 1 year old 3D monitor does have 1 deadish pixel (it can't turn black anymore, just stays green then) and that's it (i suspect that to be due to the passive 3D technology's complexity - the other older 23" screen still works 100%). The TV and my HDTV decoder don't always get along either, but i suspect that's more due to the decoder then the TV.

The phone was a gift but i bought the screens because at the time, they where all the best quality for the price you got. Their main contenders are sony and samsung, and while i have an older 42" samsung TV as well which works just fine, their newer lines just aren't either as sharp or as colorfull as the LG screens. Even worse samsung often uses a glass plate instead of a matte screen which reflects light like crazy. In the store you can always see the samsung TV's from afar since you can clearly see the ceiling lights's reflection in them while all LG TV's just have a little yellowish blur. And they're ugly. Astethics doesn't matter much to me but i still noticed them to be quite tacky.

And Sony... well... Unless you go with the really expensive bravia's, their TV's are always worse in one aspect to the LG's. They use more power, have a lesser crisp image or the colours are less vivid, pick one. Also they tend to be more pricey even in the low segments.

So like with any company stick with what they know. Even though in today's world everything is built to fail a dehumidifier built by GE will still outlast one built by LG. Should GE ever enter the monitor/LCD market however, i'll just stick with my LG's.


RE: Response from public
By Belard on 6/22/2012 8:56:02 AM , Rating: 2
I never knew they made any tablets until now.

You know Apple owns the market when give-aways and prizes are only for iPads.


By Taft12 on 6/19/2012 1:45:55 PM , Rating: 2
Well it didn't take long for the first of MS' partners to respond to middle finger they got courtesy of the Surface announcement.

Interesting times ahead!




By Helbore on 6/19/2012 3:51:49 PM , Rating: 3
I thought LG manufactured Android tablets, rather than being a Microsoft partner?

It seems more like MS just scared off a competitor without even having brought a product to market. I'd say MS aren't carrying too heavily if that is the case.


By Solandri on 6/19/2012 4:11:29 PM , Rating: 4
More than likely this was a decision LG made weeks ago and the announcement shortly after Microsoft's announcement is just coincidental. I cannot imagine a bunch of LG execs hunched over their computers in a room, hitting tech websites to read the (speculative) specs of Microsoft's Surface and the few short hands-on reports, then deciding "OMG we can't compete against this. Shut down our tablet production immediately!"


By Belard on 6/22/2012 8:59:05 AM , Rating: 2
It would not be the first time that MS has destroyed a product /company by announcing a product themselves... and sometimes never deliver.


Also the nexus tab
By kleinma on 6/19/2012 1:18:16 PM , Rating: 3
Even though Samsung will make it, google releasing the nexus tablet as a "flagship" tablet means that it will be THE android ICS tablet to get. That and only Samsung has managed to make a compelling android tablet at all. (my HP Touchpad running CM9 does a decent job, but is unsupported and features are not all working, plus battery life sucks horribly).

So now android tablet makers have to deal with a flagship google tablet, a flagship Microsoft tablet, and of course the iPad. It is going to be very hard for 3rd parties to produce a product that you want more than the flagship models.




RE: Also the nexus tab
By leviathan05 on 6/19/2012 1:42:08 PM , Rating: 2
I agree. 3rd party manufacturers will be fighting for a small sliver of mainstream tablet consumers and the bulk of niche users.


RE: Also the nexus tab
By aurareturn on 6/19/2012 2:30:31 PM , Rating: 2
Yep. And low-end tablet makers, in my opinion, will never be able to match the price of the Kindle Fire. Amazon sells the Fire at a loss because they make money in other ways with the devices they sell.


RE: Also the nexus tab
By StevoLincolnite on 6/19/2012 5:49:08 PM , Rating: 2
That's actually the same business model that console manufacturers use.
I'm not complaining though, it makes other manufacturers become more aggressive to hit a lower price point which is great for the consumer.


RE: Also the nexus tab
By daveinternets on 6/19/12, Rating: -1
RE: Also the nexus tab
By jvillaro on 6/19/2012 4:48:45 PM , Rating: 2
Thought it was ASUS who was making the Nexus tablet


Nexus tablet too
By Tanclearas on 6/19/2012 1:24:23 PM , Rating: 2
LG is probably leaving the market because they are going to face competition (rumoured) directly from Google as well. It is a crowded market, and it is easy to see that there is little money to be made in it by third-party companies.




By zephyrprime on 6/19/2012 2:17:57 PM , Rating: 2
This is too bad as I believe the natural makers of tablets would be phone makers since the two devices are virtually identical except for size. Unfortunately for LG, Google has let them down because Android just isn't a very good OS for tablets. I have ICS on my tablet and while it is serviceable, it just isn't as usable as the ipad (which I have also had). Worst of all, all android devices seem to have lag. I've found that the only thing that eliminates lag on an android device is to turn it's clock throttling off but of course doing this kills battery life.




By TakinYourPoints on 6/19/2012 10:56:14 PM , Rating: 2
Third party hardware manufacturers are going to go mainly Android on tablets now that Microsoft is in the game. Pressure is really on Google now to give a better environment for developers and customers. They have momentum in smartphones but right now they have the worst tablet platform, and part of it is that they insist that there is no difference in smartphone and tablet applications. This is ridiculous, given that an interface designed for a 4" screen is very different than one optimized for a 10" screen.

An iPad or Metro app designed specifically for tablets is going to be much better, so again, pressure is on Google to realign their thinking, lest they lose even more marketshare once Win8 RT drops.




Making progress......
By Linuxluver on 6/20/2012 1:54:45 AM , Rating: 2
I bought the original LG Optimus 3D and was generally happy with it. It's glasses-free 3D screen is better than the HTC Evo 3D screen....despite the LG phone being lower spec otherwise.

I was *just* happy enough with it to buy it's successor, the LG Optimus 3D Max. I've had it for about 2 weeks. LG definitely got this one right. It's slimmer, lighter, faster and all-round just better.




New Lenovo S2109 Tablet
By Cypherdude1 on 6/20/2012 2:20:08 AM , Rating: 2
For anyone who's interested, Lenovo is coming out with a new tablet called the S2109. It has a 9.7" screen. What makes it unique is that it has four external SRS surround sound speakers, very cool. The S2109 should reach retailers in June. The MSRP is supposed to be $350 which means it will sell for probably around $300. Go here for a video demo:
http://tinyurl.com/Lenovo-S2109-Story




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