LG Electronics said Monday that its board decided to terminate the company’s loss-making smartphone business, with analysts saying focus is now expected to shift to the more profitable home appliance and TV divisions.
LG hasn’t been a visible player in New Zealand’s phone market for years. For that reason, it won’t be missed. Yet there was a time when it was a leading Android phone brand.
LG pioneer brand
The company was a pioneer, showing up when Google’s phone operating system first challenged Apple’s iPhone. In 2013 LG was the world’s third largest phone brand.
In this business, when you fall, you fall fast.
It is six years ago since I last reviewed an LG mobile phone. The G4 was decent enough, but it offered nothing outstanding.
And that was the problem. It’s phones fell out of favour because they didn’t offer anything special.
In 2016 I visited the company’s Mobile World Congress stand. From memory it was showing an oddball modular phone. The G5 was the successor to the phone I reviewed a year earlier. It came with plug-in options to add extra features.
Lack of interest
While that idea attracted attention at MWC, it did not resonate with phone buyers.
The other highlight of LG’s MWC stand was a virtual reality product. I can’t recall anything about it except LG chose to use exactly the same VR content as almost every other brand showing the technology.
In other words, OK, but nothing special.
These were not good omens. I remember discussing this with a colleague at the time and we decided LG wouldn’t be around much longer.
I could be surprised LG hung on this long. After all, its phone business has lost money for six years in a row. Yet the company is a South Korean chaebol. These are odd beasts that can deal with everything from shipbuilding to making TV programmes.
This structure allows profitable divisions to prop up loss-making divisions longer than might happen in less diversified companies.