LG Voyager at Verizon Wireless Ready to Take on the iPhone

| November 21, 2007 | Competitive Intelligence Report

| Analyst: Avi Greengart

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: High

Event Summary

November 19, 2007 - The Voyager by LG is available now at all Verizon Wireless stores and online for $299 with two year contract after rebates. The Voyager’s large external 2.8” touch screen with VibeTouch, V CAST Mobile TV capabilities and full QWERTY keyboard are sure to put it at the top of many shopping lists this holiday season. The Voyager also includes an HTML browser, and the ability to play .mp3, .wma, and unprotected .aac and .aac + files.

Analytical Summary

• Current Perspective: Positive on the LG Voyager, because LG has delivered a solid entertainment-oriented featurephone jam-packed with technology and features. The Voyager should appeal to anyone seeking an iPhone-like touchscreen phone at Verizon Wireless and should thrill consumers who have the breadth of coverage and depth of wallet to enjoy V CAST Mobile TV (MediaFLO). It offers 3G, a QWERTY keyboard, GPS, the ability to set it down with the second screen open, and full HTML browsing. However, it is not an iPhone killer. The user interface is pedestrian, it does not synchronize calendar and contacts from a PC, and its music and video capabilities badly lag Apple’s iPhone/iTunes combination. While the $299 Voyager will not dent the iPhone’s sales, it should sell briskly on its own, and if LG ever concentrates on building one really good product rather than a dozen interesting ones, Apple could be in trouble.

• Vendor Importance: Very high to LG, as the Voyager is its flagship product in the U.S. market. In the carrier-constrained U.S. market, LG gets to compete with Apple head-on this holiday with a powerful ally and limited competition. Verizon Wireless, which has the strongest carrier brand message (“most reliable network”) started with teaser TV ad campaigns and will undoubtedly continue to pour money into promoting the phone. Meanwhile, while HTC offers the Touch, there is no direct competition in the U.S. from Samsung, Nokia and Sony Ericsson.

• Market Impact: High on consumer handsets and smartphones, because the Voyager marks several firsts: it is the first featurephone at Verizon Wireless with full HTML browsing capabilities, the first touchscreen phone at the carrier, and by far the best implementation of MediaFLO (V CAST Mobile TV). The Voyager gives Verizon Wireless subscribers an alternative to the iPhone. It also highlights the difference between device categories – a significant Voyager weakness is that it is a featurephone, not a smartphone, and it does not synchronize PIM information with a PC.

Recommended Competitor Actions

• It is now five months since the launch of the iPhone and Apple still has not fixed some fairly basic flaws. Apple needs to provide more IT-friendly corporate email support, more email management options (batch deletion and a way to turn off HTML messages would be a good start), a way to search for contacts on the phone, video recording, the ability to add third party applications, and synchronization of iPhone Notes with Outlook Memos.

• Simply fixing flaws is not enough - Apple cannot stand still, and must add 3G, GPS and Adobe Flash support for Safari. Since everyone else is stealing some of Apple’s ideas, the company might as well return the favor; Nokia’s touch-for-time and flip-to-silence are fantastic.

• Like LG, HTC needs to improve the responsiveness and comprehensiveness of TouchFLO to match Apple and then put the UI on top of all of its smartphones, including models with sliding/tilting QWERTY keyboards to compete with LG. HTC must also work to better integrate touch into the base Windows Mobile 6 OS so that switching between the two environments is not so jarring.

• Samsung should pay close attention to where LG falls short and ensure it does not make the same mistakes when carriers inevitably ask the vendor to bring its touchscreen products, like the F700, to the U.S.

• If Nokia is serious about competing with Apple, it needs to do more than just create Web services for European customers, it needs to compete with Apple in the U.S. That means working with carriers and building CDMA smartphones. (And that likely means resolving its dispute with Qualcomm, which is probably best for both companies.)

Recommended End User / Customer Actions

• Verizon Wireless customers unwilling to leave the carrier’s network who are looking for a Web and entertainment oriented handset should give the LG Voyager their attention. If they live in areas with good V CAST Mobile TV coverage, they should consider adding that service as well – it really makes the entertainment capabilities of the phone come alive.

• Verizon Wireless customers who are simply looking for a basic music phone have two reasonably price choices at the carrier: the Samsung Juke ($99) and second generation LG Chocolate ($175 - $200 including the cost of storage, USB cable and headphones).

• Consumers looking for the most innovative entertainment phone this holiday season should follow the hype to an Apple or AT&T store; despite new competition and some 1.0 design flaws, the iPhone’s overall user experience remains unmatched.

• Sprint customers unwilling to switch and looking for a touchscreen phone should give the HTC Touch a test drive – preferably a long one - to ensure that the touchscreen smartphone’s two user interfaces and some usability issues are not a problem.

• T-Mobile doesn’t offer its customers a touchscreen iPhone rival yet, but the HTC Shadow is a strong consumer-oriented smartphone that costs half of what Verizon Wireless is asking for the LG Voyager.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - New Wireless Research Portal | More information
| Client access - Mobile Devices | More information

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