A year after LG left the smartphone business, Samsung is the big winner

A year ago, the company announced that it was leaving the phone business. The company's mobile division had been posting huge losses for years. It left a significant void in the US smartphone market, especially in the pre-paid space, where LG had a strong presence.

There was an intriguing opportunity for another device maker to fill the void, and it might have been OnePlus, which had recently started bringing budget phones to the US. Maybe another Chinese brand could get a foothold in the US.

The obvious answer was not to be a challenger. The A-series phones have been the big winners in the absence of LG. The A-series phones contributed to the sales growth in the fourth quarter of the year. The best-selling device in the US in the year 2021, according to it, was the Galaxy A12 and the best-selling device at Metro by T-Mobile.

It hasn't been a complete sweep, but it did gain some traction. The US smartphone market is still a two-party system, even though the space has changed with the departure of LG.

Let's be clear who the loser is, and it's certainly not LG. Even though he was excited to cover the company's mobile division, the bottom line was that it was losing hundreds of millions of dollars. There are a lot of profitable products in the group. It makes sense to cut this loose.

It's doing fine. The people who buy phones are the ones who lost out. When it comes to choosing a new phone, we don't have another option than to stick with Apple and SAMSUNG.

Photo by Allison Johnson / The Verge

What made them a good choice to fill the position? For one, strong brand recognition. Jeff Moore, an analyst at Wave7 Research, says that's important in the prepaid space. The brand name helps with that. When people switch carriers, that provides a big boost to the company.

Logistically, it was a good position for the company. The company has good relationships with US wireless carriers. It's hard to sell phones in the US without them. The company had five A-series devices in its budget phone portfolio in 2021.

The fact that the A-series phones are just plain good is something else. They are the best option at every price point under $500. Improvements on the software side have been made by the company. It offers the longest security support policy among the phones it sells in the US, with some A-series models getting up to five years of security updates. It is working on getting major OS version upgrades to older devices sooner. The A32 5G is starting to get the newer version of the operating system even though other manufacturers still ship with the older version.

The company can get paid more than once when it sells a phone. Adding volume hits its bottom line not just on the sale of the phone, but on the sale of the components as well.

The strategy that has paid off is that of the incentives and the right pieces of the puzzle that went after the market share of LG. According to Counterpoint's reporting, in the fourth quarter of 2020, the market share of the company was 16 percent. The number was up to 22 percent in the fourth quarter. The A32 5G was the fifth-best selling phone in the US in January of 2022. Problems with keeping its products in stock has been a problem for the company. In the second quarter of the year, shortages for A-series devices somewhat stifled the growth potential of the company.

Photo by Allison Johnson / The Verge

The gains were significant too. Before the space was taken by LG, the company held around 5 percent of the US market. It went up to around 10 percent after the first quarter of 2021. Counterpoint pegs it at 12 percent share in the fourth quarter of 2021, a jump from 3 percent in the same period of 2020. The Moto G Pure is a very good device in the under $200 category. It has been enough to propel it to the No. 3 slot in market share, but it is lagging behind by 10 or 20 percentage points depending on the quarter.

Are we really missing much with the absence of a major brand? Both Greengart and Moore think so. Greengart mentioned that the company was the first to put five cameras on a phone and the first to use the ultrawide camera as a complement to the main rear camera.

He notes that the phones were often discounted, which made them an appealing alternative to the Koreans. They dropped in price because they weren't as good. That opened up a good deal: a phone that is almost as good as the one from South Korea for a lot less money.

The US is dominated by two brands: Apple and SAMSUNG, but there is room for movement in the prepaid space. It is hard to imagine that will change soon. The duopoly has not been able to put a dent in the recognizable brand. The case study in what happens when a challenger puts all of the pieces together and really goes after some of the market share is the Pixel 6.

There had been hope that they could make a run at the duopoly, but they are still in the low.

Even though it didn't grab all of the market share, it gained enough to consolidate its lead. Set, game, match.