Over the years, LG has become a household name, famously known for their electronics, home appliances and of course, mobile phones. However, for LG, the journey which started about 14 years ago, has unfortunately come to an end as the company has decided to stop making phones. LG is said to join the ever-increasing line of phone manufacturers such as Microsoft, Blackberry, Motorola, HTC etc. that have become defunct – closing down operations on phone manufacturing.
It cannot be denied that LG has been a major player in the phone manufacturing industry as the company was the first to produce the capacitive touch screen phones even before Apple Inc. LG has sure had its fair share of attention in the gadget space with its modernistic phones such as the G Series, V Series, New Chocolate, Nexus amongst others.
Albeit, in an announcement made on the 5th of April 2021, LG Electronics disclosed that it had decided to shut down its mobile business unit; the company giving reasons saying that the smartphone market had become “incredibly competitive”.
What could have gone wrong?
To say that LG had seen better days, would be the absolute truth. In 2013, the phone brand was amongst the top 3 phone manufacturers in the world, trailing behind Apple and Samsung. Down the line, many complained of the company’s phones having software and hardware issues, as well as slower OS updates compared to other brands. Reuters reported that in 2020, LG shipped only 23 million phones compared with 256 million for Samsung. It was recorded that its market share price had drastically reduced to 2% and its mobile phone unit was turning in a revenue of 7.4% which was the smallest of the company’s five divisions.
The recent news, therefore, does not come as a surprise to some as the smartphone unit of the South Korean conglomerate recorded huge losses of about $4.5 billion over the past six years. With newer brands like Huawei, Oppo, Xiaomi gradually pulling their weight in the market, the fate of LG though sad, was inevitable.
Many stated that this was because the company failed to leverage marketing strategies to help increase its customer base in other countries. Before its decision, LG ranked as the top 3 brands in North America and top 5 brands in Latin America.
It then suffices to say that the company’s decision is a strategic one.
What comes next for LG?
Following its decision, LG Electronics are set to diversify to ensure a broader service base and customer base. In the statement issued on the 5th of April 2021, the company stated: “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.” Looks like LG is set to give some technological giants a run for their money (Watch out Tesla!)
Also, LG has mentioned its plans to employ its mobile expertise in the development of other mobile technologies such as the 6G. This means, that although it will be shutting down its mobile business unit, it has no plans of going down anytime soon.
This begs the question as to the fate of the existing LG smartphone users. Well, LG stated that the shutdown process will not be completed until the 31st of July, 2021 and one might still be able to purchase an LG smartphone even after that; it will also continue to provide support services and software updates to its existing phone users.
All good things must come to an end, and the end of one journey is the beginning of another. Although LG has decided to bow out of the smartphone business, it isn’t backing down. After all, has been said and eventually done (given the July 31st timeline), one can only hope that LG’s decision to stop producing phones will turn out for the best.
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