As always, things are not looking good for LG’s phone division. As reported by The Korea Herald, LG Electronics CEO Kwon Bong-sook sent a staff-wide memo that the company was considering to make major changes to its smartphone division, including possibly leaving the smartphone business. Was.
Last week, Korean news outlet TheElec also wrote about the memo in a now-deleted post. The post was removed because LG described the report as “completely inaccurate and without merit”. This week, LG is confirming the same memo report originally from the Korea Herald, complete with comments from LG. The Verge also received information from LG about the report.
“As competition in the global market for mobile devices is raging, it’s time for LG to make a cold decision and the best option,” an LG official told the Korea Herald. “The company is considering all possible measures, including sales, withdrawals and downsizing of the smartphone business.”
LG’s smartphone business has been facing problems for some time. As the report states, LG’s smartphone division won about 5 trillion ($ 4.5 billion) in the last five years. The official income calculation is divided into 22 consecutive losing money quarters. Today you will not find LG on the “Global Smartphone Market Share” chart; Instead, it would be buried in the “other” category. In the US, Counterpoint has LG at 13 percent of the market, mostly due to pre-paid sales.
The CEO of LG Electronics got into the position only 13 months ago and undoubtedly is evaluating LG’s only money-losing division over the past year. In an interview in January 2020, soon after he was appointed CEO, Kwon promised that “LG Electronics’ mobile business is going to be profitable by 2121.” It is still unclear whether this is considered a reasonable goal for the company.
Alec’s original scoop is supported and translated here. You should definitely take it with a grain of salt as the outlet has removed the post and does not stand behind it, but as of now, it appears to be correct. It has an interesting tidbit that is not reported in other reports: LG will announce a direction for its mobile unit on 26 January. Alec also claimed that LG sent an instruction “to stop all development”, with “other than the project”. The project “is a code name for LG’s flexible-display LG rollable smartphone. The final bit of the report seems very laudable in raising the possibility that the LG brand will never actually leave the smartphone market and instead logo different white-labels Will give form to ODM companies.
Why would someone buy an LG phone?
LG never had a solid sales pitch for the smartphone wars. At the high end of the market, LG has always seemed overshadowed by its larger Korean rival, Samsung. It shipped high-spec phones with heavy Android skin and poor update plans, and when Samsung offers the same thing with big brand recognition, why would anyone choose LG? At the lower end of the market, especially in the US, the company has reliably shielded cheap, anonymous phones in carrier stores and the pre-paid market. This is something that needs to be done, but again, there is nothing here that will make LG stand out from the crowd.
Anything, LG has a very poor reputation when it comes to smartphone manufacturing. The company’s phones are known for dying early and “boot looping”, a useless Android failure state where the phone reboots repeatedly due to poor flash memory. LG sued Boot Loop in 2017, with the lawsuit naming each high-profile LG device released in 2015 and 2016. LG ended up settling. I know that I have personally put four LG-built Google Nexus 5Xs to rest on boot loop issues.
When the company was not occupying the same lane as Samsung, it was doing a ridiculous gimmick, which would be forgotten after a year or two: it had the LG G5 with its modular accessories like a clip-on camera grip; Inexplicably banana-shaped LG G Flex; And an obsession with various “dual screen” designs such as the LG V10’s notification display, the LG V50’s clip-on second screen and the LG Wing’s “T” shaped design. You can see the company trying to do something different to stand out, but none of it was an idea good, Or at least they were not a hit with consumers.