LG Gram's Success Strategy in the Competitive Laptop Market (Korean IT Market Insight)

LG Gram's Success Strategy in the Competitive Laptop Market

This article focuses on the context of the South Korean laptop market in the early 2010s.

The PC market is highly competitive, with numerous companies vying for consumer attention. In this crowded market, LG Electronics launched the ultra-lightweight 'Gram' laptop in 2014, quickly making a name for itself. According to the market life cycle, the PC market is in its maturity phase. Amidst the shrinking and highly competitive laptop market, the introduction of the Gram was a turning point for both LG Electronics and the laptop industry. When first released in 2014, the Gram sold 125,000 units, and within three years, its sales tripled. The Gram significantly increased the market share of ultra-lightweight laptops, driving the trend from 30% market share in 2013 to over 70% in 2017.

 

 

 

This chart shows the market share of ultra-thin laptops (under 18mm thickness) by different manufacturers in South Korea. The data, sourced from IDC, highlights the sales figures for each company:

• LG Electronics: 368,771 units
• Samsung Electronics: 300,890 units
• Apple: 189,003 units
• Asus: 35,716 units
• MSI: 21,453 units

 

This indicates LG Electronics' leading position in the ultra-thin laptop market in South Korea.

 

Development Process and Differentiation Strategy

In the early 2010s, the tablet market, led by the iPad, was rapidly growing, leading to predictions of a shrinking laptop market. However, LG Electronics anticipated that laptops, valued for their portability and large screens, would continue to be favored by consumers. They believed that an ultra-lightweight laptop would appeal to this market segment.

In 2012, the standard for ultra-lightweight laptops was Intel’s "Ultrabook," known for being thin and having long battery life. However, global laptop manufacturers focused mainly on these aspects and did not prioritize reducing weight. LG Electronics, through market research, found that existing Ultrabooks were still considered heavy. This insight led to the development of a laptop weighing less than 1 kilogram. LG saw this as an opportunity for innovation.

Development and Marketing Strategies

The development team at LG was tasked with creating a laptop that weighed 980 grams. Internally, there were doubts about focusing on weight over performance, but LG prioritized market demands. The development team was divided into groups focusing on circuits, batteries, displays, and keyboards, each with a target weight reduction goal. They eliminated unnecessary features, such as touch screens, to achieve this goal. Gradually, they managed to reduce the laptop's weight.

Besides technical elements, cost reduction was also crucial. The team was encouraged to find ways to offset increased costs, ensuring feasible technological advancements. Standardizing internal components of the Gram series achieved economies of scale, reducing additional costs with each new release.

Innovative Battery Technology

One major challenge was the small battery capacity, requiring users to carry heavy adapters. LG addressed this by increasing battery capacity instead of reducing it, developing advanced battery technology in collaboration with LG Chem. This resulted in significantly longer battery life, setting another point of differentiation for the Gram.

Marketing and Brand Building

LG Electronics did not neglect marketing the Gram’s unique features: its weight under 1 kilogram and battery life exceeding 24 hours. The sleek, white, lightweight laptop could easily fit into a bag, making it popular among students and office workers. The Gram, with its thin profile and stylish design, became known as a laptop that was "light and beautiful enough to take to Starbucks," joining the ranks of premium laptops like Apple’s MacBook.

Conclusion

LG Electronics successfully built the Gram brand by differentiating through weight and battery life. As the PC market matured, LG avoided participating in low-price competition. Instead, they introduced the premium feature of an ultra-lightweight laptop, securing market share and establishing a trend in the Korean laptop market.

Sources

• Donga Business Review. (2021). Analysis of the success factors of LG Gram laptops. Donga Business Review.
• Kim Hyung-gil. (2023). LG Gram, 14% market share in North America… No. 1 in premium ultra-light laptops. Korea Economic Daily.
• Kim Hyung-gil. (2022). LG Gram expands market share in the premium laptop market. Korea Economic Daily.
• Shin Jae-seop. (2017). LG Electronics shakes the laptop market with the ultra-light 'Gram'. Donga Ilbo.
• Yoon Sung-hwan. (2017). LG Electronics reorganizes the laptop market with 'Gram'. Maeil Business Newspaper.
• Yoon Sung-hwan. (2023). The secret to the success of LG Gram. Maeil Business Newspaper.