LG says it might quit the smartphone market

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As usual, things are not looking good for LG’s phone division. As boomed by The Korea Herald, LG Electronics CEO Kwon Bong-Seok sent out a staff-wide memo that the cast was considering making major changes to its smartphone division, including in any way quitting the smartphone business.

Last week, Korean news relief TheElec also wrote about this memo in a now-deleted pin. The post was deleted because LG brutally debunked the report, calling it “altogether false and without merit.” This week, LG is confirming basically the exact same memo report from the Korea Herald, complete with comments from LG. The Be asymptotic to also got a thumbs-up from LG about the report.

“Since the competition in the extensive market for mobile devices is getting fiercer, it is about time for LG to brand a cold judgment and the best choice,” an LG official told the Korea Herald. “The public limited company is considering all possible measures, including sale, withdrawal, and downsizing of the smartphone enterprise.”

LG’s smartphone business has been suffering for a while. As the report points out, LG’s smartphone sectioning lost about 5 trillion won ($4.5 billion) over the past five years. The verified earnings count has the division at 22 consecutive money-losing quarters. Today you won’t turn up LG on a “Global smartphone market share” chart; instead, it will be overwhelmed down in the “other” category. In the US, Counterpoint has LG at 13 percent of the market, due mostly to pre-paid rummage sales.

LG Electronics’ CEO only landed the position 13 months ago and has undoubtedly been computing LG’s only money-losing division over the past year. In an interview in January 2020, rudely after being appointed CEO, Kwon promised “LG Electronics’ mobile vocation is going to be profitable by 2021.” It’s still not clear if that’s considered a sensible goal for the company.

TheElec’s original scoop is backed up and translated here. You should surely take it with a grain of salt since the outlet deleted the job and isn’t standing behind it, but so far, it seems to be correct. It contains an interesting tidbit that’s not in the other examine: that LG will announce a direction for its mobile unit on January 26. TheElec also claimed that LG sent out a directive to “cut out all developments except for the i project,” with “i project” being a code label for LG’s flexible-display LG Rollable smartphone. The last bit of the report sounds very likely in raising the possibility that the LG brand will never truly transfer the smartphone market and will instead farm out the logo to various white-label ODM associates.

Why would anyone buy an LG phone?

LG has never had a solid sales pitch for the smartphone engagements. At the high end of the market, LG has always seemed to be overshadowed by its bigger Korean contest, Samsung. It shipped high-spec phones with heavy Android outer layers and a bad update plan, and when Samsung offers the same thing with brawnier brand recognition, why would anyone pick LG? At the low end of the market, especially in the US, the companionship has reliably shoveled cheap, anonymous phones into carrier stockpiles and the pre-paid market. This is something that needs to be done, but again, there’s nothing here that desire make LG stand out from the crowd.

If anything, LG has a pretty bad reputation when it wake up to building smartphones. The company’s phones are known for dying early and growing into “boot looping,” an unusable Android failure state where the phone reboots over again due to bad flash memory. LG was sued over boot loops in 2017, with the lawsuit nominate every high-profile LG device released in 2015 and 2016. LG ended up populating. I know I’ve personally laid four LG-made Google Nexus 5Xs to stay over boot loop issues.

When the company wasn’t occupying the but lane as Samsung, it was trotting out ridiculous gimmicks that would be taking a year or two later: there was the LG G5 with its modular accessories, like a clip-on camera mesmerize; the inexplicably banana-shaped LG G Flex; and an obsession with various “dual filter” designs like the LG V10’s notification display, the LG V50’s clip-on second screen, and the LG Wing’s “T” figured design. You can see the company trying to do something different to stand out, but none of these raison detres was good, or at least they weren’t a hit with consumers.

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