The demise of LG’s mobile division after 25 years was confirmed on April 5, with the disbanding of its smartphone operations expected to conclude by this summer.

Despite once being one of the world’s premium smartphone vendors, the South Korean company had seen 23 straight quarters of loss in the sector and struggled to gain any sort of foothold in the market in recent times.

LG’s mobile market share had steadily declined throughout the 2010s from eight per cent in 2008 to just one per cent last year.

The company says it will now focus on growing other parts of its industry, such as IoT, electric vehicles and core 6G network technologies.

Mobile News has rounded up the analyst and industry reaction to the news.

Chief analyst and CMO CCS Insight Ben Wood

For years it has been speculated that LG would exit its mobile phone business and recently the rumour mill has been deafening, so it is little surprise it has finally pulled the plug. It’s a sad day for the South Korean consumer electronics conglomerate, given its long history of making mobile phones that has spanned quarter of a century.

LG’s decision to abandon mobile phones reflects the unrelenting competitive pressure it has faced in recent years. Its traditional arch-rival, Samsung, was always considered to be the biggest threat, but arguably it’s the slew of relatively new Chinese rivals that have likely beaten it into submission.

LG clearly decided it could no longer accept the endless losses associated with the company continuing with its mobile phone business.

It’s a brave move by a giant consumer electronics player given the sheer scale of the global mobile phone business. With more than 1.6 billion mobile phones expected to be sold in 2021, this makes it one of the most prolific consumer electronics businesses on the planet, but understandably, there is no point being in a high-volume business if you can’t make money.

It feels like LG’s business has been in a steady downward spiral for several years. Despite numerous statements over the years from the management team that LG remained committed to the division, over the last 12 months it has become increasingly clear that the outlook was not bright.

More recently, LG has offered a growing number of quirky devices, be that phones with a secondary clip-on screen or the dual-screened LG Wing that opened to form a cross-like shape.

It’s hard to know whether these were just ill-judged bets or acts of desperation as LG tried to take a different approach to rivals, but sadly, with the benefit of hindsight, they did little to help the company.

There is little doubt that a number of other sub-scale phone makers will see LG’s news and wonder how long they can remain in such a highly competitive, oversaturated market.

IDC research manager Marta Pinto

It’s sad but not unexpected news. LG has been declining in market share globally since 2013, and in the last couple of years has concentrated its presence in the US and Brazil.

Despite innovation efforts that led to so many LG devices – from the Flex with a flexible display to the Wing and even rollable displays – the pressure for profitability in an aggressive and saturated smartphone market led to the decision to fade the brand.

With the high-end market being almost solely disputed by Apple and Samsung, and a highly competitive battle in the mid-range and entry-level price segment between several Android manufacturers, added to an already mature market, LG was not able to come up with a portfolio that fit market demands. With devices either too expensive or too gimmicky, consumers did not embrace the vendor’s devices.

In Europe, efforts to reorganise logistics and bring in new top managers did not revert the situation, despite the need for alternative smartphone manufacturers to introduce healthy competition in the market and allow consumers to have more choice of devices and prices.

Going forward, I still hope to see LG continue to succeed in other device categories, bringing more innovative solutions to the market.

PP Foresight tech media and telco analyst Paolo Pescatore

LG should be applauded for making such a decision to exit the mobile phone business altogether – one that was not taken lightly given the company’s proud heritage in consumer electronics.

It still remains a strong player in other segments, including TVs. Yet despite this,

the company was not immune to the many obstacles that led to unsuccessful product launches and, in turn, significant losses over numerous years.

New supercycles such as 5G offer providers a once-in-a-lifetime opportunity to enter and steal market share in a crowded landscape, but LG failed to capitalise on this opportunity.

Ultimately this is the right – though painful – decision that follows other high profile casualties, including Blackberry and Nokia, due to the arrival of smartphones.

While LG will be remembered for seeking to drive innovation, it failed to connect with users. It was not afraid to experiment, so it seems fitting that the LG Wing will be among the company’s last hurrahs.

However, it is a pity that we will not see the LG Rollable smartphone, which created a buzz like its rollable OLED TVs – an impressive feat of engineering.

The demise of LG serves as a further testament to the changing competitive environment and the need to be agile due to the ever-changing demands of consumers.

There are important lessons for all providers, regardless of whether they are at the top of the hill or new pretenders. Yet more will fall by the wayside given the cut-throat nature of the smartphone business.

Bullitt Group chief sales officer Nick Muir

My first experience of LG was while at Motorola. We were still riding high on the V3 legacy in general – MOTOSLVR and MOTOKRZR were launching and all looked good in the world.

Enter the LG Prada, 2007. It may not have been the biggest seller – it was expensive – but it inspired instant phone envy, everywhere. It still looks good now, and the rumours still circulate that it ‘inspired’ the design of the first iPhone, released six months later.

Not only that, it also had the world’s first capacitive touchscreen – to understand what a change that was, you really had to try some of the resistive-touchscreen phones out there at the time.

Cool designs kept coming in the form of the Shine, Secret, Chocolate, Prada II and others, but they didn’t seem to have the same impact. They had a go at the youth market too (KS360 anyone?) and embodied the noughties search for the killer feature.

The G series looked like it might cut the mustard for a while – industry firsts came, with wide-angle cameras, high-end screen resolution, work (and co-branding) on the Nexus devices.

But Android updates were late, the infamous ‘bootloop’ issue seemed to live across device ranges, and despite hiring some notable industry figures – the UK alumni list is nearly as extensive as Motorola’s – LG became associated with poor service.

YouTube tech reviewer and former Carphone Warehouse employee Dave West

Being from the UK, a lot of the later models in LG’s smartphone line-up were never officially released here. However, I was lucky enough to have experienced some of their older devices that were popular in the noughties and beyond.

LG has never been afraid to be different, with its quirky designs and unusual but nonetheless eye-catching features offering something just that bit different to entice you from buying the safe and popular Samsung D500 or yet another Nokia handset.

I was once an employee at Carphone Warehouse and I recall us shifting huge numbers on the Three network of the LG U8120, which at the time was one of the best flip phones I’d ever used.

Then there was the U900, which felt like a (very early) test bed for the LG Wing.

Entirely pointless and broke like a pencil, but fun all the same. Phones that really stick in the mind were the hugely popular LG Chocolate and Prada models, with the former arriving in an incredible retail package that always got a wow from its new owner when setting up in-store.

This was followed by the BL40, with an ahead-of-its-time 21:9 aspect display and 5MP camera with Schneider-Kreuznach optics. Then the excellent Optimus range, and finally the G series.

LG has given us so many ‘firsts’, such as ultra-wide cameras, quad DACs, textured backs, the Prada with its capacitive touchscreen and the LG Renoir with its amazing (for its time) 8MP camera. Finally, there was the V series, which gained a cult following among smartphone enthusiasts with their top-of-the-line specs.

Ultimately, LG’s mobile division is one to be remembered with fondness, not contempt. LG should be proud of what it achieved with its mobile line-up. Without the company, we may have never got to experience so many of the great features we have come to take for granted today.

After months of speculation, LG has confirmed it is pulling out of mobile.

The company was expected to announce its withdrawal in a few months but has now confirmed it is shutting down its smartphone division by July 31.

A statement from the company said: “LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services.

“LG will provide service support and software updates for customers of existing mobile products for a period that will vary by region. LG will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. Details related to employment will be determined at the local level. Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products.”

The wind-down of the mobile phone business is expected to be completed by July 31 although the inventory of some existing models may still be available after that.

Sad day

CCS Insight chief of research Ben Wood said: “For years it has been speculated that LG would exit its mobile phone business and recently the rumour mill has been deafening, so it is little surprise LG has finally pulled the plug.

“It’s a sad day for the South Korean consumer electronics conglomerate given its long history of making mobile phones which has spanned a quarter of a century.”

Wood says that LG’s decision to exit the market reflects the fierce competition the vendor has faced in recent years from Chinese brands.

“LG’s decision to abandon mobile phones reflects the unrelenting competitive pressure it has faced in recent years.

“Its traditional arch-rival, Samsung, was always considered to be the biggest threat, but arguably it’s the slew of relatively Chinese rivals that likely beaten it into submission.”

And Wood was critical of some of LG’s most recent smartphones, including the dual-screened LG Wing.

“More recently LG has offered a growing number of quirky devices, be that phones with a secondary clip-on screen or the dual-screened LG Wing which opened to form a cross-like shape.

“It’s hard to know whether these were just ill-judged bets or acts of desperation as LG tried to take a different approach to rivals, but sadly, with the benefit of hindsight, they did little to help the company.”

“There is little doubt that some other sub-scale phone makers will see LG’s news and wonder how long they can remain in such a highly competitive, over-saturated market.”

Mobile News’ view – by Ian White

The demise of LG as a mobile manufacturer is not surprising, There are too many Android device makers in the market to be sustainable. The commodity handsets and app-based ecosystem pioneered by Apple killed Blackberry and Nokia. We wouldn’t be surprised to see the number of Android handset makers pared down to just a few Chinese vendors.

“LG made good phones but they flopped at marketing, and became irrelevant in brand desirability. There are still room for others but the Chinese vendors are killing legacy manufacturers on price by having tiny margins of a few percent. So, without a strong brand it is nigh impossible to compete. Legacy vendors such as Sony are hamstrung by rigid corporate management, while the new kids such as OnePlus can make decisions in hours.

LG’s potential withdrawal from the mobile device sector is déjà vu.

The list of those global behemoths who failed to innovate and move with the times is a salutary lesson of how hubris and arrogance can topple the mightiest edifices.

Nokia, Motorola, NEC, Microsoft, Mitsubishi, Panasonic, Siemens, BlackBerry, Ericsson and Sony have all found that complacency and arrogance are a fatal combination.

Foot in mouth

Let’s revisit some of the more entertaining analysis that poured forth when the great disruption of the iPhone began.

Do you remember this? “There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidised item.” Steve Ballmer, the then-CEO of Microsoft does. Let’s continue our where-are-they-now game with Jim Balsillie, former co-CEO of BlackBerry manufacturer RIM (remember them?) giving his views on the iPhone.

“It’s kind of one more entrant into an already very busy space with lots of choice for consumers… But in terms of a sort of a sea change for BlackBerry, I would think that’s overstating it.”

Motorola

Motorola’s downfall from practically owning the entire mobile market at one point in the early 2000s wasn’t so much due to the iPhone as its refusal and inability to acknowledge any other product. Even when the writing was on the wall for the proprietary and clunky operating system, Motorola still refused to consider moving to Android.

And then there was Nokia, a company that led the wireless revolution in the 1990s and made the best must- have phones you could buy.

By the end of 2007, half of all smartphones sold in the world were Nokia’s, while iPhone had a mere five per cent share.

Remember the N95? (See image) For the tech of the time, it was awe-inspiringly good device with a 2.6-inch LCD screen, 5-megapixel camera, up to 8GB of storage, 3G and WiFi connectivity, and a built-in GPS receiver.

No wonder Nokia executives could barely suppress their giggles when Steve Jobs announced a 2G device with a 2MP camera and no GPS.

Of course, Nokia missed the big picture which was that the mobile phone had now transitioned into a computer that just happened to include a phone capability. This changed the game, showing how design and interface-for-dummies can beat raw technology.

Rise and fall

Nokia’s rise and fall was a classic of market-dominating companies being reduced to dust by not being agile. By the time the iPhone gained traction, Nokia was just playing catch-up with an inferior operating system called Symbian. But it wasn’t technology or the iPhone that killed Nokia. It was internal politics.

Nowadays, new start-ups such as OnePlus have learned from the corporate malaise that can destroy a brand when it gets too big for its boots. Will we one day be writing about the demise of the iPhone? Unlikely. But who would bet on Elon Musk or another whizz-kid yet to be discovered taking a big bite out of Apple?

LG will reportedly close its mobile division next week after months of speculation according to sources from South Korea.

An announcement on the future of the company is expected on April 5 and with LG failing to sell the division, it now looks as the mobile sector will be closed for good.

The South Korean vendor has seen 23 straight quarters of loss in mobile and in the last ten years, LG has consistently lost share in global markets.

Its stock has fallen in the UK mobile smartphone market to just one per cent from 8 per cent in 2008.

For more analysis on LG’s recent woes in mobile, click here. 

The outlook for the future of LG’s mobile division appears bleak. While the Korean vendor was once a pioneer in the mobile industry, reports have surfaced that the company is looking to exit the mobile industry completely following 23 straight quarters of losses.

The company has not publicly announced anything on this front, but the situation continues to be heavily reported and has gathered steam since January, when CEO Kwon Bong-seok reportedly sent out an internal message to staff hinting that the vendor may exit the smartphone market.

And LG’s future in smartphones was plunged further into doubt after it emerged from industry insiders that its head of mobile in the UK, Andrew Coughlin, left the company in January.

Then, on February 17, a story in The Korea Times claimed that a ‘Russian sovereign fund’ was looking into a potential acquisition of LG’s mobile business.

The article also touted Facebook and Volkswagen as possible reported buyers. Most recently, The Dong-a Ilbo (via Bloomberg) reported that the company may close down its mobile division completely after negotiations to sell its mobile business failed.

LG has also shelved production of phones with a rollable display, while the report claims that the company has also halted the rollout of all new smartphones that were set for release in the first half of this year.

LOSSES

In the past ten years, LG has consistently lost share in major countries around the world, including its domestic market of Korea.

The company’s tribulations in the mobile sector have become more surprising while other parts of its business have continued to strive.

In 2019, the company took 16.3 per cent of the TV market worldwide, second only to Samsung according to statistics from T4. Yet the company still cannot land a solid consumer base when it comes to mobile.

IDC research manager for European mobile devices Marta Pinto notes that although other aspects of LG’s business are prospering, it is very visible that its smartphone segment is declining by double digit figures.

“The channel presence is also declining sharply, which contributes to the suspicions of the brand withdrawing from the market soon,” she says.

Pinto says that from a pure management perspective, its other segments may suffer if the company pours money into a loss-making unit.

SALES

And in recent times, LG has struggled with sales of some phone models. One of its major recent devices, the LG Wing, failed to impress, according to a report by Herald Corporation.

The report says fewer than 50,000 units of the device were sold in its home country of South Korea by the end of 2020 after being launched in October.

This was equivalent to just 10 per cent of Samsung Galaxy Note20 sales, despite those smartphones being released not long before.

LG’s potential abandonment of its mobile division means that consumers will be left with one less option to choose from among vendors.

The vendor had, meanwhile, always been seen as an innovator in mobile until a decade ago, yet its stock in the industry has plundered to just one per cent of the UK smartphone market – down from more than eight per cent in 2008.

Pinto notes that alongside the domination of Apple and Samsung rising in the UK, LG would have to make huge investments in brand awareness and product placement to recover from such a position.

“It is very unlikely that a management facing a declining share will want to invest in recovering from that position in a highly competitive and concentrated market when LG has other business streams that are thriving,” she says.

RIVALRY

In the UK, the climate is even more challenging when considering the rise of up-and-coming vendors to the market that have enjoyed success in a relatively small period.

While Pinto notes that LG losses can be traced to an earlier date than the entrance of the Chinese vendors, companies such as Xiaomi, Realme and Oppo provide stern competition.

These companies have been able to offer devices at lower price points than existing players, with a wide-ranging portfolio that caters to the needs of consumers who are not willing to spend on flagship brands.

This would point to LG therefore needing to show a competitive portfolio and make use of long-term relationships with channels to place products, but Pinto says this would require a huge amount of investment that a loss-making unit would struggle to muster.

And as reports continue to surface about the potential demise of LG’s mobile division, industry insiders think it now looks a matter of when – and not if – the company shuts the segment down for good.

Former LG head of mobile Andrew Coughlin has reportedly left the company as the vendor’s future in mobile remains uncertain.

According to industry sources, the Korean consumer electronics company offered Coughlin a redundancy package which was accepted last month.

This comes after CEO Kwon Bong-seok sent out an internal message to staff hinting that the Korean vendor would be exiting the smartphone market.

Insiders have noted that Coughlin will not be replaced and Mobile News has reached out to Coughlin for comment.

LG has announced its third quarter revenue hit a record high £10.94 billion (KRW 16.92 trillion).

Overall sales for the period grew 7.8 per cent, with operating income up 22.7pc from last year.

Strong growth in home appliances and home entertainment helped drive the solid quarter.

Its mobile division also showed signs of improvement with sales year-on-year unchanged, and up 16.5 per cent from Q2.

LG’s mobile division amassed sales of £988 million for the quarter, while third-quarter operating loss improved YoY, due to increased efficiency in production and cost savings.

There has also been stronger demand for mass-tier models, with the company planning to strengthen this line-up of handsets.

The Korean vendor recently launched its ambitious LG Wing smartphone. This features an innovative swivel form factor.

LG has announced the LG Wing, a smartphone with a new swivel screen form factor.

The device’s main screen swivels out to form a T shape, with a smaller second screen underneath it. These screens can be used independently of each other or in conjunction when using gaming apps.

The 5G-capable device is the first of LG’s new Explorer Project range of devices, which it says will focus on new smartphone designs.

However, according to LG, some of this functionality requires the use of pre-installed browsers.

In hardware terms, the main screen is a 6.8-inch P-OLED FullVision Display, while the second screen is 3.9 inches. The phone runs on the Qualcomm Snapdragon 765G chipset, although LG has not disclosed RAM and ROM specifications.

The LG Wing has a triple rear camera setup, with a 64MP main sensor, 12MP ultra-wide lens, and 13MP wide lens. Swivel mode enables the small screen to be used as an editing palette while videos or photos are displayed on the main screen.

Additionally, LG has implemented a 32MP pop up camera that appears when the phone is in swivel mode.

“LG WING ushers in a new era of mobile discovery and is an exciting beginning to our Explorer Project initiative,” said LG’s Mobile president Morris Lee. “Different than anything else on the market today, this innovative device challenges the industry status quo and provides consumers with a new mobile experience that will open up new ways to think about the smartphone.”

The LG Wing will launch in South Korea next month, with North America and Europe to follow. Currently, pricing is unavailable.

Update

LG has confirmed that the name of the first device it launches as part of the new Explorer Project will be the LG Wing. Reports suggest that the device will have a secondary screen that rotates into a T-shape, as hinted in the preview video LG sent out to announce the new category.

Original

LG has announced plans for a new line of phones called the Explorer Project, which seeks to explore new smartphone form factors.

The manufacturer will kick off its campaign for the product line with an online event on September 14 that it has previewed with a video on its YouTube channel.

In a statement, LG said it started the Explorer Project “in response to the diverse usage needs of today’s smartphone customers and to deliver much-needed curiosity and excitement to the mobile sector’”.

It will focus solely on new usability and innovative designs, while LG’s pre-existing consumer smartphones will become part of its Universal Line.

LG is also partnering with multiple industry partners to aid in feature development, while Qualcomm will provide chipsets for the devices. These partners include South Korean search engine provider NAVER, American streaming services Tubi and Ficto, and video sharing service Rave.

Ficto will coincide the global launch of its streaming service with the launch of the Explorer Project, while NAVER is developing a version of its Whale browser with unique features for Explorer Project devices.

“LG and platform partners feel it is vitally important to demonstrate to consumers new and differentiated user experiences in the smartphone space,” said LG Mobile Communications Company president Morris Lee.

“LG has always been a pioneer in pushing the envelope of smartphone form factors, the only way to bring about much needed innovation in the mobile market.”

LG has announced the launch of its 5G flagship device the V60 ThinQ.

The latest addition to the V series includes a 64MP main camera, 13MP wide-angle lens, and 8K video capabilities.

The Korean vendor’s latest device features a 5,000 mAh battery, a 6.8-inch 2460×1080 OLED display, 8GB of RAM and either 128GB or 256GB of storage.

The V60 ThinQ runs on the Qualcomm Snapdragon 865 processor.

LG Mobile Communication Company president Morris Lee said “Our strategy is to introduce differentiated 5G devices to meet the rise in consumer demands as the global 5G market matures

“The LG V60 ThinQ 5G with the dual-screen is the ideal device for consumers who love to create, consume and share content in the 5G era.”

The company says that the V60 ThinQ will ship out to key markets in North America, Europe, and Asia next month.