LG was once a pioneer in the smartphone world, but couldn’t keep up with the growing competition from China. But it is also similar to other manufacturers.
In the past few months there have been rumors of the traditional manufacturer LG’s exit from smartphones. The South Korean company confirmed the speculations on Monday: on July 31, 2021, it will cease its smartphone business. In the tech talk, TECHNOLOGY BUTTON discussed whether other manufacturers will follow who are also having a hard time in the controversial market.
The sale of LG’s smartphone division failed
In January, LG announced that the company was considering selling its smartphone division. As Reuters reported, the talks about the sale to the Vietnamese Vingroup failed because of different ideas. LG has been in the red for years. In the past six years alone, the losses have now grown to 4.5 billion US dollars (approx. 3.8 billion euros).
Are other companies following LG’s example?
Apart from Samsung, the other traditional manufacturers also have a very difficult time in the smartphone market. Sony, HTC and Motorola have been in the red for years. Above all, Sony’s situation is comparable to that of LG. Like LG, the Japanese manufacturer only supports the smartphone division through its strong core business with TV sets and consoles. Sony also sees the smartphone business as an extension of its ecosystem. The company recently demonstrated this with the Xperia Pro. A smartphone that can serve as a 4K display for expensive Sony cameras. Although the company is officially behind the smartphone division, it is not clear how long the executive suite will carry the deficit business. Finally, LG denied any rumors about a closure of its smartphone division until Monday.
Motorola is in a special position as a pioneer in telecommunications, it still holds many patents and technologies. The company made headlines with its new edition of the Razr with a folding display. However, most of its devices are budget and mid-range models. For the time being, Motorola is still showing stamina. The company has already presented twelve new models in 2021 alone.
HTC, on the other hand, hardly seems to be represented on the smartphone market any more. The company sold a large part of its workforce and patents to Google in 2017. In 2020 HTC presented only four models, so far one in 2021. Apart from a blockchain smartphone from 2019, the former flagship manufacturer has not brought any more innovations onto the market. Instead, HTC is focusing on 5G technology and the Vive VR headset. Exiting the smartphone business is therefore only a matter of time.
Once the third largest manufacturer in the world
LG was a pioneer in many ways. Not only do we owe the company QHD-Displays, but also the ultra-wide-angle camera, which can now be found in almost every smartphone. Thanks to its innovations, the company rose to become the third largest smartphone manufacturer behind Samsung and Apple in 2013. In the 2nd quarter of 2013, LG was able to claim 5 percent of the global market. In 2015 it was 4 percent, in 2016 3 percent and now only 2 percent.
LG’s smartphone division cannot reach the masses
LG often tried to create sales arguments through gimmicks such as interchangeable mods, attachable displays and operation using hand gestures. However, the hardware was often immature and was dropped after only one generation. In addition, despite several attempts, LG has not managed to implement an appropriate update policy. Android updates often arrived far too late and in some cases did not arrive at all – even with expensive flagship models. The company also failed because of its visibility for potential buyers. While Samsung and Chinese manufacturers like Xiaomi and OnePlus are causing a lot of fuss about their smartphones, LG often launched new devices without media attention.