LG says it could exit the smartphone market | GeekComparison

As usual, things aren’t looking good for LG’s phone division. As reported by The Korea Herald, LG Electronics CEO Kwon Bong-Seok sent a staff-wide memo that the company was considering making major changes to its smartphone division, which could include quitting the smartphone business.

Last week, the Korean news channel TheElec also wrote about this memo in a now-deleted message. The post was removed because LG brutally debunked the report, calling it “completely false and baseless.” This week, LG essentially confirms the same Korea Herald memo report, complete with comments from LG. The Verge also received kudos from LG for the report.

“As competition in the global mobile device market intensifies, it is time for LG to take a cold look and make the best choice,” an LG official told the Korea Herald. “The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”

LG’s smartphone business has been suffering for a while. As the report points out, LG’s smartphone division has lost about 5 trillion won ($4.5 billion) over the past five years. The official winning count has the distribution on 22 consecutive cash-losing quarters. Today you won’t find LG in a “Global smartphone market share” chart; instead, it is buried in the “other” category. In the US, Counterpoint LG has 13 percent of the market, mainly thanks to prepaid sales.

LG Electronics CEO got the position only 13 months ago and has undoubtedly evaluated LG’s only loss-making division over the past year. In a January 2020 interview, shortly after his appointment as CEO, Kwon pledged that “LG Electronics’ mobile business will be profitable by 2021.” It’s still not clear if that’s considered a reasonable goal for the company.

TheElec’s original scoop has been backed up and translated here. You should definitely take it with a grain of salt as the outlet removed the post and don’t back it up, but so far it seems to be correct. It includes an interesting tidbit that isn’t in the other report: that LG will announce a direction for its mobile unit on January 26. TheElec also claimed that LG had sent a directive to “stop all development except the i-project”, with “i project” being a codename for LG’s flexible-display rollable smartphone. The last bit of the report sounds very plausible by raising the possibility that the LG brand will never actually leave the smartphone market and will instead outsource the logo to various white-label ODM companies.

Why would anyone buy an LG phone?

LG has never had a solid sales pitch before the smartphone wars. At the high end of the market, LG always seemed to be eclipsed by its bigger Korean rival, Samsung. It delivered high-spec phones with heavy Android skins and a poor update plan, and if Samsung offers the same with greater brand recognition, why would anyone choose LG? At the low end of the market, especially in the US, the company has reliably pushed low-cost, anonymous phones into carrier stores and the prepaid market. This is something that needs to be done, but again, there’s nothing here that would set LG apart from the rest.

In any case, LG has a pretty bad reputation when it comes to building smartphones. The company’s phones are known for dying early and going into “boot looping,” an unusable Android glitch where the phone reboots repeatedly due to bad flash memory. LG was sued in 2017 for boot loops, with the lawsuit citing every high-profile LG device released in 2015 and 2016. LG finally settled. I know I personally put down four LG-made Google Nexus 5Xs to rest over boot loop issues.

When the company didn’t occupy the same job as Samsung, it spouted out ridiculous gimmicks that would be forgotten a year or two later: there was the LG G5 with its modular accessories, such as a clip-on camera grip; the 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 tell the company is trying to do something different to stand out, but none of these ideas were goodor at least they weren’t a hit with consumers.

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