Apple May Join Forces with LG to Keep Samsung in Check

Apple is seeking to fill the space left by LG Electronics’ withdrawal from the mobile phone business. LG Electronics is looking for new business opportunities by forging a partnership with Apple, the world's largest smartphone manufacturer. These two companies are starting to make moves to hold Samsung Electronics in check in areas such as smartphones and home appliances.

Apple recently announced on its website that it will offer a trade-in program for LG smartphone users in the North American market. The company will deduct US$70 to US$180 from iPhone prices when customers trade in LG smartphones. A total of four models including the LG G8 ThinQ, V40, V50 and V60, which were all released after 2018, are eligible for the trade-in event.

Earlier, Apple began to run a program in Korea that pays 150,000 won additionally to trade-in prices when LG smartphone users purchase the iPhone. This is a move to absorb LG Electronics’ 10 percent share in the Korean smartphone market.

Apple has also begun appealing to LG consumers in North America. Although LG Electronics' global smartphone market share is around 2 percent, its share stood at 10 percent in North America. This is why Apple began the trade-in program for LG smartphones not only in South Korea but in North America.

Apple began the trade-in event to keep Samsung in check, industry experts say. According to Strategy Analytics (SA), Samsung Electronics took the top spot in the global smartphone market in the first quarter of 2021 with a 23 percent stake, larger than Apple’s 17 percent. Samsung rebounded from 17 percent in the fourth quarter of 2020, while Apple dropped from 21 percent.

Apple recorded a 22 percent share in the Korean market in the first quarter, far behind Samsung Electronics’ 67 percent.

As it no longer competes with Apple in the smartphone market, LG electronics seems to be looking for new business opportunities by establishing partnerships with the U.S. company in earnest.

After withdrawing from the smartphone business, LG Electronics is pushing to sell Apple's mobile products such as the iPhone at its home appliance distribution store LG Best Shop. Existing smartphone sales personnel at LG Best Shop can sell Apple's products, attracting young Apple customers to LG Best Shop.

In addition, an Apple sales event was recently held for executives and employees of some affiliates at Life Care, an online mall for LG Group's employees. It is quite symbolic for Life Care to sell non-LG smartphones. This indicates that LG Electronics started recognizing Apple as a partner after withdrawing from the smartphone business.

Until now, LG group affiliates such as LG Display, LG Chem, and LG Innotek supplied displays, batteries, and camera modules to Apple. The group is also seeking to join hands with Apple in the automobile business.

Earlier this month, LG Electronics launched LG Magna e-Powertrain with Canada's Magna International, the world's third-largest auto parts maker. With the launch of LG Magna e-Powertrain, LG Group has finished preparations for entry into the electric vehicle market.

Market watchers predict that Apple may join hands with LG to launch the Apple Car in 2024. Apple may choose LG because it is not easy to create partnerships with existing carmakers such as Hyundai Motor, Volkswagen, and Nissan.