By July 2021, the world could say goodbye to LG Electronics Inc.'s global mobile division for good. A settlement is then expected even though sales of their equipment and spare parts continue for stocks that are still available in the market.
Reports earlier this year had already forecast the division's closure after nearly six consecutive years with losses of around $ 4.5 billion.
The last time LG Mobile made a profit was in 2014, and at that time they were considered one of the world's leading smartphone manufacturers with groundbreaking designs.
It started well
The smartphone market has always been highly competitive, but LG has been a tough competitor in some ways because of its risk appetite.
2011 was a pivotal year for LG as it entered the Guinness World Records after its Optimus 2X was (announced and released) the world's first publicly available dual-core phone.
Granted, there were problems with the operating system, but early adopters were more than happy to overlook the shortcomings. This would also set the tone for LG's adventurous spirit when it comes to their phones.
LG's first G-series smartphone, the Optimus G, was already considered better than the Samsung and HTC flagship, but LG made it even better in 2013 with the G2.
It had a larger battery than the Samsung Galaxy S4 and HTC One M7, and its camera supported 1080p / 60fps recording before Samsung. In the same year, the Optimus L4 was also the first triple SIM smartphone on the market.
In 2015, the G4 brought back some variants with leather, a feature that Huawei, Oppo and Vivo have since copied. It also had a microSD expansion and a removable battery, the latter being a feature LG would have in some of its future smartphones as well.
It was well received by a certain group of users because it enabled them to swap and charge the empty battery on the go using the “cradles” also sold by LG.
Perhaps one of the most talked about LG smartphones in history is the V20, launched in 2016. It was LG's first smartphone to offer the Quad DAC, a system that improves the audio quality of the connector.
The V20 with its replaceable battery
It would become a trademark of LG's smartphones, making them the go-to place for audiophiles, DJs, and musicians.
Other revolutionary and unique smartphone designs that LG has developed over the years are the LG G Flex, the world's first flexible smartphone, the V40 with its five cameras (another world first for LG) and the LG dual-screen case .
When competitors looked into foldable phones, LG took a different route and instead offered users an optional second screen that they could attach and detach from their V50, G8x, and V60.
So what happened
In the first quarter of 2014, LG announced that more than 5 million LTE-enabled smartphones had been sold, 79% more than in the entire previous year.
It was a record for the company at the time and they said they shipped a total of 12.3 million smartphones in the first trimester of the year.
Not to mention, at the time, the company also had an extensive portfolio of smartphones at various prices, making them an accessible choice for many.
However, some major issues would plague the company's cellular line, causing them to lose revenue in an instant.
1) Boot loop issues that broke customer trust
LG's flagship at the time, the G4, had bootloop issues in 2015, a hardware issue that causes a phone to go into a never-ending restart cycle. Affected users were forced to go to service centers and were given replacement G4s, but unfortunately many replacement products had the same bootloop issues.
This understandably broke customer trust and maybe even brand trust, and in 2018 LG settled a class action lawsuit over bootloop issues not only on the G4, but also on the G5, V10 and V20, to name a few other affected phones .
2) They had an innovative spirit, but the implementations were inadequate
The LG WING in action / Photo credit: LG's video at CES2021
Always wanting to give users a different experience, LG started experimenting with modular smartphones. They made it possible to connect various attachments to the underside of the G5, which should offer additional functions.
However, the number and usefulness of the modules were limited and therefore unpopular with consumers.
3) An extreme slowness for important software updates
The company has a poor track record of delivering critical software updates to users on their flagship devices in a timely manner. Indeed, they acknowledged this several times and announced that they would develop a department to speed things up.
In 2018 we achieved this with the software upgrade department, but for some reason few changes were seen in their slowness.
4) Bad marketing efforts compared to competitors
When was the last time you saw a marketing campaign or advertisement for LG's smartphones? For me it would be many, many years ago and mostly in movie theaters during those 20 minute ad sections.
Compared to other smartphone brands like Samsung and Apple, LG never really pulled out all the stops when it came to calling out the introduction of a new phone. This resulted in their launches usually flying under the radar until the reviews indicated something unique or quirky.
Unfortunately, the one or two standout features were never really enough to convince consumers to buy.
5) They were often the first, but rarely the best
The LG V60 with the dual-screen housing / Photo credit: GadgetMatchs Review of the LG V60 on YouTube
One of LG's strengths was their experimental approach to creating unique designs. What they lacked, however, was the belief that they would develop them in their prime.
This made them the first to introduce many then unique designs that have since been adopted and improved more quickly by other brands.
Take, for example, the ultra-wide camera feature and its initial frameless print with the G2, both features that were instead popularized by their competitors.
– // –
It is clear that other brands preferred the path of safe improvement through iteration, but LG always preferred to try something new or radical.
Unfortunately, the mass market hasn't always appreciated their innovative moves, resulting in slower adoption and sales. Early adopters alone cannot maintain a brand.
While the mainstream market would look back on LG smartphones and ask: "Why do we need something like this at all?", The pool of users who are still enthusiastic LG fans replied: "But why not?"
- Here you can read our other articles related to business failure.