Geekspeak: What went wrong with LG's smartphone business

LG’s exit shows how competitive the smartphone market has become

LG sells thousands of televisions, refrigerators, air conditioners, tumble dryers, ovens and washing machines every day all over the world. But, despite the committed effort over several years, it has never been much of a force in the smartphone segment. Its high-end devices struggled to match up to phones made by Apple and Samsung, and it never stood a chance against the Chinese players in the lower segments. So, it did not come as a surprise for many people when the South Korean chaebol announced its decision to exit the smartphone business.

You cannot blame LG for not trying. While most handset makers stuck to the ‘slab’ form factor, LG came up with a modular smartphone (the G5 in 2016), a few dual-screen models (the G8X ThinQ, for instance) and even a rotating screen model (the Wing). A rollable phone was in the making. But it never had a big hit, and has been losing millions of dollars every year just to be in the business.

There is a long list of high-profile smartphone makers giving up over the years. Nokia’s smartphone business was taken over by Microsoft. Now a company called HMD Global uses the brand name, but it is a minnow in the fragmented Android market. BlackBerrys are no longer made by RIM; the brand was used by TCL briefly, and OnwardMobility is planning to come up with a model this year. Again, not many people are buying them. HTC, once the king of Android phones, now sells very few of them. Dell, HP and Acer have all tried for a piece of the smartphone pie, but in vain. Sony, which makes fantastic cameras, music players and displays, inexplicably remains a marginal player in the smartphone market.

Five companies—Apple, Samsung, Xiaomi, BBK and Huawei—account for about 80 per cent of the world’s smartphone sales. Some100 other manufactures vie for the remaining 20 per cent, making it almost impossible to get noticed or make profits. LG might have been an exception in this 20 per cent, as its phones attracted attention. That this attention seldom reflected in sales is another story.

Will anyone miss LG handsets? Unlikely. But the smartphone world is definitely less exciting without it. 

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