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Growing competition means exciting times ahead for smartphone buyers

LG and Huawei are launching new flagship models, while Motorola has another affordable smartphone on the way

By Mikael RicknäS
May 6, 2014 10:19 AM ET

IDG News Service - LG, Motorola and Huawei will all launch new smartphones in the next three weeks as they try to chip away at Apple and Samsung Electronics, a task that doesn't seem as insurmountable as it did a year ago.

   LG G2 (3)

There is more competition than ever coming from the second-tier smartphone brands, market research company Strategy Analytics said last week. Its numbers for the first quarter showed that Samsung and Apple lost market share year-on-year. For Samsung it was the first time that happened since the end of 2009.

Huawei and Lenovo both helped cause these drops. Huawei is expanding in Europe, while Lenovo continues to grow outside China, including in, for instance, Russia. If Lenovo's Motorola Mobility acquisition is approved in the coming months, it will create an even larger competitive force for Samsung and Apple to contend with during the second half of this year, according to Strategy Analytics.

"From Motorola, Lenovo can learn how to manufacture more advanced 4G smartphones for U.S. and European consumers. Lenovo has been heavily focused on low-cost 2G and 3G devices in China for the past few years, but it's currently lagging badly in the international market," said Neil Mawston, executive director at Strategy Analytics.

Motorola can also help Lenovo develop better products, according to Carolina Milanesi, chief of research at Kantar Worldpanel.

"Motorola can help Lenovo deliver a rich Android experience and get the balance between design and technology right. Motorola still has key relationships with carriers such as Verizon which will certainly help Lenovo," she said.

About six months ago, Motorola launched the Moto G, a device that redefined how much smartphone you can get for less than $200 without a contract. Next week the company will launch another affordable smartphone, hoping to build on the success of the Moto G.

As competition heats up, Lenovo will be able to take advantage of Motorola's work on cheap smartphones as well. To make up for a less than stellar first quarter, Samsung recently said it would develop more low-end phones -- a move that puts vendors like Lenovo in the crosshairs.

Before Motorola gets to show off its low-end prowess, Huawei is expected to launch the Ascend P7 on Wednesday at an event in Paris. The new Android 4.4-based flagship model will have a 5-inch full HD screen, a 13-megapixel camera and an 1.8GHz quad-core processor, according to rumored specifications.

On paper, that adds up to a product that can hold its own against most other devices. But today's smartphone market is about more than hardware specifications. To become more competitive, Huawei needs to continue to improve the quality of its smartphones, but most of all, the company has to work on brand perception, according to Milanesi.

Reprinted with permission from Story copyright 2014 International Data Group. All rights reserved.
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