On a recent weekday morning, LG Electronics took over a top-floor Manhattan suite overlooking the Hudson River. Each room was adorned carefully with a cadre of new devices: smartphones, tablets, headphones and smartwatches. Despite what the expansive view might suggest, LG was aiming for an intimate vibe.
It was certainly low-key: The hotel lobby staff had to call to determine which room LG had rented.
It was a stark contrast to the opulence on display last Wednesday morning, when Samsung, the other Korean electronics giant, seized entire venues in Berlin, Beijing and New York for its latest product launch. And the LG showroom pales next to the event planned for Tuesday, when Apple is expected to unmask its newest iPhone in a stadium that seats more than 2,300 people.
That contrast captures the conundrum for handset-makers. None have the marketing war chest of Samsung nor the brand equity of Apple. Yet, this holiday season, when handheld device sales typical flourish, the veterans of the industry -- LG, HTC, Motorola -- will be joined by a handful of newcomers, including technology titans Amazon and Sony, pitching their smartphones to a U.S. population already awash with them.
Last holiday season, from September to December, Samsung outspent HTC, LG and Blackberry, combined, on wireless-product spending, according to Kantar Media & Millward Brown Digital. Apple also outspent the trio in each month but November.
While operators will still work very closely with Apple and Samsung for the holiday push, they have begun to warm to other brands. U.S. telecom operators, still the main smartphone retailers, are facing peaking revenue growth, and thanks largely to T-Mobile, a pricing war. Several analysts said the carriers are anxious about the influence Apple and Samsung wield and are opening their marketing pocketbooks to alternatives.
"The carriers started to get a little bit concerned that they only have a couple of players dominating their network," said Ben Bajarin, a tech analyst with Creative Strategies, a research firm. "To some degree, Samsung was starting to look more like Apple in dictating what they want from the networks."
Third place up for grabs
Apple claims 42% of the U.S. smartphone market, as of June, according to comScore. Samsung grew from 5.5%, four years ago, to more than a quarter of the market. LG quietly climbed to third this January, after months of decline from Motorola and Blackberry. (HTC was reclassified as an "original equipment manager" in 2011, which explains its peak on the chart below.) Yet the third-place title is still up for grabs.
In that race, LG has a leg up.
"We're coming into the holiday time-frame with a lot more momentum than what we've had in the past," Frank Lee, a senior brand manager with LG MobileComm, said at its recent event. While Samsung suffered a bruising second quarter, with mobile sales dipping, LG posted its best quarter in three years with profits leaping 27%, on the back of solid smartphone growth. It has become more inventive in its U.S. advertising, turning to digital and content marketing to promote its G3 smartphone, released in May.
Mr. Lee was pointed about where LG sees itself in the market. "We are that third contender," he said.
Others have also stepped up their game. A day before LG's event, HTC held its own gathering, where Erin McGee, an HTC marketing executive, pledged to keep running with "Ask the Internet," its digital-heavy ad campaign meant to capitalize on positive reviews of its flagship One M8 phone.
"We design products for those in the know," said Ms. McGee, VP-marketing of North America for HTC. "We're not going to shout at you."
Gift from the carriers
HTC also has an ally or two. Over the summer, Microsoft began an ad campaign for its Windows and Nokia phones pitting Cortana, its personal-assistant feature, against Siri and Apple. Its latest ad, from this week, featured the HTC , which recently launched with the Windows software.
Both Microsoft and Verizon Wireless, the exclusive carrier of the new HTC Windows phone, are throwing considerable marketing weight into the device, Ms. McGee said. AT&T and T-Mobile have pledged they will carry the phone as well, cutting short Verizon's claim to exclusivity.
AT&T has been aggressively pushing its exclusive tie-up with the new Amazon Fire phone and has drawn closer to Windows. Verizon and Sprint, analysts said, have strengthened ties with Motorola and its incoming parent, Lenovo. Sprint, aided by its majority owner, Japan's Softbank, recently introduced a device from the Japanese manufacturer Sharp -- it is being marketed as a premium phone, priced below the iPhone. At the low-end, with its Boost Mobile line, Sprint is also partnering with the Chinese company ZTE. The carrier is also reportedly bringing Sony's first smartphone to the U.S.
These few carrier exclusives, however, are now more anomalies than in the past, said multiple media agency executives and analysts. Instead, the carriers are invested in broadening their device portfolios.
Still, smartphone sales growth in the U.S. is plateauing. Over the next five years, shipment growth will climb just 3.6% annually in developed markets, according to recent estimates from IDC.
"Everyone who wants a smartphone, has one," said Mr. Bajarin. "Now it just comes down to, 'You've got to take share from the other.'"
That dynamic will put marketing at the forefront in the coming months.
With the mobile industry rapidly expanding -- joining smartphones are new tablets, 'phablets,' smarwatches and even virtual reality devices -- the room to buy media is growing cluttered, said Gibbs Haljun, managing director of media investment at GroupM. "That category gets occupied relatively quickly," he said. "[Apple] will try to blanket the market as best they can."
A few marketers are confident they can steal share without the colossal marketing budgets. "You don't have to spend the gross domestic product of a country to be effective," said Mike Sheldon, CEO of Deutsch LA, the U.S. agency for HTC.
But Mr. Sheldon admitted a new iPhone launch will make the remainder of 2014 challenging. "That's certainly going to cast a large wake," he said. "To say you're going to out-scream that is ridiculous."