Striving for Existence
According to industry sources, LG Electronics will release Q6 and Q6+, the derivative models of its flagship smartphone G6, eaarly next month. Its G6+ and G6 32GB made their debut on July 2 after the G6 was released on March 10.
The company is releasing slightly-changed smartphones very frequently as mentioned above although its situation is far from good. LG Electronics remained in the red in the smartphone market for nine quarters in a row until the second quarter of this year, when its losses in the market amounted to 100 billion won (US$90 million). The company’s endeavor is because smartphones can create new growth opportunities in combination with the IoT.
The recently released models are slightly changed ones in fact. According to experts, its lineup expansion based on similar products is to increase its sales and keep rivals at bay at the same time at a low cost. The number of mobile phone retailers is estimated at 20,000 in South Korea. Assuming that two units are sold to each retailer, the sales volume can be increased by approximately 40,000 units and this can lead to an increase of 15 billion won (US$13.5 million) to 20 billion won (US$18 million) in sales.
In addition, such models rarely require significant R&D costs as they are based on slight modifications. Their profit margins are much higher than those of original products as R&D takes up the largest portion of smartphone production costs. This means modified models can be highly helpful for loss reduction. Both Q6 and Q6+ are expected to come with a near flagship performance and be priced at less than 700,000 won (US$630).