A leading mobile device analyst warned LG Electronics could be on a road to nowhere by attempting to compete in the highest echelons of the smartphone market with a device priced at more than $1,700.

David McQueen, research director for consumer devices and strategic technology at ABI Research (pictured, right), told Mobile World Live it is hard to assess the chances of LG’s Signature Edition smartphone, which the company this week announced would return for a second run after selling an initial batch of 200 units in July.

The vendor stated it will release a total of 300 Signature Edition smartphones, offering premium features including a processed Zirconium Ceramic back plate; 6GB of RAM and 256GB of built-in storage; a 6-inch, 18:9 aspect, HD display; an artificial intelligence (AI) controlled camera setup; and sound output “tuned” by experts Bang and Olufsen.

McQueen questioned LG’s strategy with the device, in particular its KRW1.9 million ($1,772) price tag: “I very much doubt the LG brand on its own still has the cachet to support this high cost,” he said.

Besides Apple, smartphone vendors typically “turn to premium brands to provide highly differentiated products,” McQueen explained, pointing to products including the Huawei Mate Porsche Design and Nokia’s now defunct Vertu brand.

Declining shipments
McQueen noted LG is losing ground in almost all tiers of the smartphone market: Apple, Samsung and Huawei hold the high ground at the top end; while China-based manufacturers Xiaomi, Oppo and Vivo are providing tough competition in the low- and mid-range.

In contrast, LG is “finding it hard to differentiate its products, with no real standout features even in its flagship devices” and previously “had its fingers burned” with innovations including 3D and curved screens “that never performed well in market.”

The analyst noted LG still holds “some strength in the US market”: given current US resistance to China-made telecoms equipment, this could prove a beachhead for any fightback by the vendor.

Despite his scepticism, McQueen noted the Signature Edition could ultimately help to guide LG’s smartphone strategy, enabling it to set a “benchmark to gauge in which segments it should be placing its energies in the future.”