Gears & Gadgets

New LG CEO won’t give up on smartphone market, promises profitability by 2021

LG is still clinging to its dying smartphone business. The company’s new CEO, Kwon Bong-seok, (who was appointed just last month!) promised a return to profitability for LG’s mobile division by 2021.

“LG Electronics’ mobile business is going to be profitable by 2021,” Kwon told The Korea Times. “I can say we can make that happen as LG Electronics will expand our mobile lineup and steadily release new ones attached with some wow factors to woo consumers.”

Kwon didn’t share many details on how he plans to resurrect LG’s smartphone business, which has lost money for something like 14 quarters in a row now. When asked by the Korea Times, the site said Kwon “only reiterated LG Electronics’ plan to expand the phone lineup.” LG sold 19 phone models each in 2019 and 2018, according to GSM Arena’s database. In 2014, the last time LG Mobile reliably turned a profit, the company produced 44 phone models—is this correlation or causation?

The high-end of the smartphone market is considered the most profitable, and LG has been seriously struggling in this area over the years. Every year, LG seems to follow the same pattern: it announces in an earnings call that it is disappointed with its current flagship smartphone sales, and the next year it releases a new flagship smartphone that is very similar to the previous, poorly selling phone. The LG G6, G7, and G8—LG’s flagship smartphones from 2017, 2018, and 2019, respectively—all share a ton of DNA, offering only gentle upgrades from one version to another. If this style of phone isn’t selling well, surely you would want to start from scratch with something truly new, right? So far, this line of thinking hasn’t clicked with LG.

LG has always struggled to differentiate itself from its hometown Korean rival, Samsung. Both offer expensive, high-end Android phones with heavy OS skins and little in the way of OS updates. LG has been making the same style of phone as Samsung, but Samsung has a better supply chain and a marketing budget bigger than the GDP of many countries. Why would you buy a phone from LG when you can get the same thing from the market leader?

LG’s reputation has also taken a beating over the years with class-action lawsuits alleging that its phones die suddenly due to defective parts and workmanship. The company ended up settling and paying out money to some customers. LG’s “boot loop” issues, where a phone continually resets and never finishes booting, has spawned memes and even has a dedicated Wikipedia page.

If LG’s smartphone business does shut down, it certainly wouldn’t be the first company to drop out of the smartphone market. The industry’s body count is legendary, with numerous companies—some of which were old stalwarts of the industry—unable to cut it in the modern market. HTC built some of the first Android devices, but the company couldn’t compete with Samsung, and it basically quit the smartphone market after it sold a large chunk of its smartphone operations to Google. You could say the same thing about Motorola, which was early on the Android boat with devices like the Moto Droid but couldn’t keep up with the crowd of other manufacturers. The company was sold to Google and then Lenovo. Sony Mobile isn’t dead yet, but the division is in the same boat as LG, with a mobile business that has been a disaster for years (did you remember Sony makes smartphones?).

All the old OS developers are dead, too. Blackberry took six years to come up with an answer to iOS and Android, the Blackberry 10 OS, and after BB10 and a later Android-based phone both failed to gain traction in the market, Blackberry ended up quitting the smartphone business and licensed the brand to TCL. Speaking of TCL, the company also owns the corpse of Palm, which tried living in the modern world with WebOS, a very ahead-of-its-time operating system. Palm ran out of cash shortly after the launch of its first WebOS phone, it was bought by HP and then later sold to TCL, where “Palm” lives on as a zombie brand. Nokia couldn’t adapt to the modern smartphone world, either, so its phone division was bought by Microsoft and died with Windows Phone. Nokia hardware has been legitimately resurrected under HMD, a Finnish company made up of old Nokia employees. And yes, we can’t forget Microsoft. RIP Windows Phone.

LG’s next big smartphone, the LG G9, is expected to be unveiled next month for Mobile World Congress. There have already been some leaks about the device, and so far it seems like more of the same “me too” design we’ve seen in previous years. Good luck, LG. Hopefully you won’t end up in next year’s Deathwatch article.

Listing image by LG

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Tech – Ars Technica

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