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Rumor LG mulls exit from smartphone market

Jethalal

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LG mulls exit from smartphone market (koreaherald.com)

LG Electronics may exit the smartphone business after losing about 5 trillion won ($4.5 billion) over the past five years.

Its CEO Kwon Bong-seok on Wednesday sent out a message to staff that hinted there would be a major change in the operation of the smartphone segment.

“Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,” he said.
“Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice,” an LG official explained. “The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”

There have been rumors that the phone vendor might be preparing to downsize, or dismantle, its mobile device business unit.
Some 60 percent of the staff there would be moved and reassigned to other business units within the company or to other LG affiliates, the rumors said. Despite its surprising teaser of a rollable display smartphone at this year’s CES technology show, some local media reported that LG would make an important announcement Tuesday regarding its smartphone division.

This is not the first time LG has been subject to such rumors, since it decided in 2019 to expand outsourcing of its low-end and midrange phone production.
At the time, the phone manufacturer denied the rumors, explaining that it was increasing the volume of original development manufacturing in a bid to raise efficiency in production and cut costs at the money-losing business unit.


Known as ODM, original development (or design) manufacturing refers to a production method where contract manufacturers design, develop and produce a particular product as specified.
Given that Samsung Electronics was also on its way to boosting ODM smartphone orders last year, LG’s strategy seemed plausible.
ODM orders surpassed 30 percent of Samsung’s total phone production last year, while LG’s exceeded 70 percent, according to data from market researcher Counterpoint.

The rumors continued as LG posted deficits in the phone segment for the past five years.
As of last year the smartphone business had posted operating losses for 23 consecutive quarters, since the second quarter of 2015.
In the third quarter of 2020, the operating loss stood at 148.4 billion won, narrowing from 206.5 billion won in the first quarter and 237.8 billion won in the second quarter.

However, the accumulated loss reached 5 trillion won over the last five years.

LG Electronics CEO Kwon, when he took office in January 2020, vowed to make a turnaround in the smartphone business by 2021.
“The company is improving profitability of the smartphone business by slashing costs, and will seek growth in the premium market next year,” Kwon told reporters at a ceremony to mark Electronics and IT Day in December.


Last year, LG made a bold decision to ditch its smartphone brand G series and to start new smartphone projects. The company launched two flagship phones: the design-focused LG Velvet and the new form factor LG Wing.
Despite the efforts, LG’s presence in the global smartphone market has diminished.
In the third quarter of 2020, LG shipped out 6.5 million smartphones, down from 7.2 million in the same quarter of 2019, according to data from Counterpoint. The company held a 2 percent share in the market
Anyone using LG phones? What's your opinion about this?
 

Cyberpunkd

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Makes sense, they will be attacked for it by geeks wanting to read about crazy designs (and never buying their phones) but it's a wise decision. If Samsung wasn't such a large company and was able to keep funneling endless amounts of money into their smartphone division since I'm sure it's a pet project for a lot of middle and top management in the Korean HQ they would have done the same.

Apple created and developed its own perfectly integrated ecosystem, the only way to combat that is to do the same + innovate, since Apple traditionally takes time while rolling any new features. You will not do that getting Google Android OEM off-shelf OS and slapping a brand layer on top of it. You will likewise not do that by pondering to tech Youtubers with 120Hz screen and similar tech metrics nobody in the general public cares about.

I use iOS since it integrates perfectly between my Mac, my iPad and my iPhone + emphasis on security. Match that and you stand a chance.
 
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nush

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A long haul flight from wherever you are.


I still want one of these so much.
 

Nikana

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Jan 26, 2016
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I used a v35 for a few years and got a great deal on it. At the time a waterproof, Snapdragon 845 phone, 1440p display, 6 GB of Ram was top of the line and i got it for $300.

I really liked it. Very good phone. That being said, their software support is pitiful. Thing is still running android 9 simply because its unlocked while ATT users got 10 but for whatever reason they just never supplied the 10 ROM. Its a lot of little stuff like that just makes the hardcore crowd say no and LG lacks the brand awareness in the smartphone market in USA to take on SAmsung when their phones are the same price or even sometimes more expensive.

The velvet line looks intriguing but too little to late.
 
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Blade2.0

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Dec 3, 2018
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NOOOOO! Then where will I get flagship specs a year later for $250 bones? Rocking the LG V50 and it's a dream! got it last year in march for $225 total or something like that. I planned to have this for 4 years then buy the year old LG phone at the time. Now I'll have to pay full price like the rest of the Plebes :(
 

Soodanim

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Feb 24, 2012
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Shame, as they made the second best phone ever - Nexus 5.

(For reference, the best ever phone is the Nokia 3310 and it's not even a contest).
I had the Nexus 4, also by LG, and that was no slouch either.

It's a shame it took so long for equivalents to come back to market, and when they did it was the top end instead of the excellent mid-range that Nexus phones were at one point.

Edit: you beat me to it with #11
 
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May 22, 2018
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Nexus was legit, pure Android experience.
Now it's Pixel :(

What a shame the Pixel line ended up being. I had been rocking Nexus phones for years, then Pixel but after the Pixel 2XL I couldn't do it anymore. The value proposition made no sense. I switched to the Samsung Galaxy s10+ and wtf the phone is light-years ahead of anything the Pixel is doing. For the basically the same price. I'll likely pick up an s21 Ultra later these year. I think I'm samsung4lyf now.
 
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TTOOLL

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I’m sure the 10 people who bought a phone from LG will be disappointed.

Android is currently pretty bad with all those Google apps watching every single step you take and still no regular updates/support for old phones. It’s a shame, I used Android for years, but got tired of that mess.
 

PuffyCan

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Unsurprising, the short / long term support for their flagship phone is horrible, I won't ever buy an LG phone beacuse of this.
 
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eddie4

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Their marketing is probably what ruined it. Look at apple and samsung, they're everywhere and they're in your face. Doesn't matter if they're not the best phones out there, if they're constantly being advertised, you'll buy it.
 

Mahadev

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Their marketing is probably what ruined it. Look at apple and samsung, they're everywhere and they're in your face. Doesn't matter if they're not the best phones out there, if they're constantly being advertised, you'll buy it.



Their shitty phones that kept breaking is what ruined it. G2 to G5 all had some terrible design flaws that bricked many phones resulting in terrible reputation for the company. Well deserved result if you ask me.
 

NeoIkaruGAF

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LG G4 was one of the best smartphones I’ve ever had. It was also the only one that died on me in a bootloop after about a year and a half.

I had another LG phone - K9, I guess? - as a work phone for a while. Terrible battery life, same problem as the G4.

I guess the onslaught of Chinese brands just swallowed LG’s market niche. The Xiaomi I currently have cost me less than the G4 did at the time, and has terrific battery life.
 
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poppabk

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LG G4 was one of the best smartphones I’ve ever had. It was also the only one that died on me in a bootloop after about a year and a half.

I had another LG phone - K9, I guess? - as a work phone for a while. Terrible battery life, same problem as the G4.

I guess the onslaught of Chinese brands just swallowed LG’s market niche. The Xiaomi I currently have cost me less than the G4 did at the time, and has terrific battery life.
Same for me, the G4 was the last phone I had that ticked all the boxes for me, ever since it has been compromise. Mine also boot looped, had it fixed under warranty only for it to start having half the screen go crazy pixel goop after 5 minutes of use about 6 months later.
Such a shame that they had major issues with their best phone.
 

Erdrick

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As someone who has been with Sony for phones since 2013, I've seen and felt their rapid decline in the market as well, and I fear eventually, they will just exit the market as well, as the above seems to be potentially doing.

Sadly, if it's not an iPhone, Samsung or Chinese brand phone these days, the rest seem doomed to obscurity or being obsolete.

Less phones on the market is never good, IMO.
 

Drew1440

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My first Windows Phone was an LG, the Optimus 7, before that I owned the LG Viewty and Renior. Very good touchscreen feature phones for their time but they were primitive compared to the Android and iPhone 3G.

I hope Sony stays in the market, currently on an Xperia 5 II and the 21:9 screen is a game changer when it comes to split screening apps
 
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Shouta

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What a shame the Pixel line ended up being. I had been rocking Nexus phones for years, then Pixel but after the Pixel 2XL I couldn't do it anymore. The value proposition made no sense. I switched to the Samsung Galaxy s10+ and wtf the phone is light-years ahead of anything the Pixel is doing. For the basically the same price. I'll likely pick up an s21 Ultra later these year. I think I'm samsung4lyf now.

I just actually just picked up a Pixel 4a myself and it reminds me of my old Nexus 5. It's nice and it was only 350 for what seemed like pretty solid specs.
 
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Woo-Fu

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Anyone using LG phones? What's your opinion about this?

Been using LG phones for almost a decade. Cheap and get the job done. I suppose if they exit the market I'll switch to Motorola, they fill almost exactly the same niche.

I wake up every day thankful that somehow I didn't get infected with the mind virus that makes people think expensive cellphones are a status symbol they can't live without. Maybe I read/watched Fight Club too many times, "You're not your cellphone."
 
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YCoCg

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They make so much bank on OLED they can afford to coast on it, not to mention they're already trying to get MicroLED out there and get it in smaller sized screens.
 

Goro Majima

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Used a couple LG (Also Samsung) phones in the pre smart phone days from like 2004 to 2012. Sprint used to give them out every couple years.

Been stuck in the Apple ecosystem for like 9 years and probably for the foreseeable future because I prefer the OS.
 

FStubbs

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I keep wanting to get an LG phone and keep buying Samsung - and I guess I'm not the only one.

Sooner or later I guess only Apple (and Samsung because they feel like it) will be making smartphones. Seems no one else can make money on them.
 

newtypepilot

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still rocking my G6.

I think they make great phones and unlike Samsung, they don't try to be a Apple copycat.

The biggest problem with LG is their weak marketing and their lack of security updates
 

DeafTourette

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My LG G6 and V40 are great phones... If the V70/Rainbow is their last smartphone then this smartphone industry deserves to lose one of the last innovative companies they had.

I had a Galaxy S7 and the screen cracked from a drop of one foot. My G6 and V40 both survived falls from higher WITHOUT a case and no cracks at all.
 
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Jethalal

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I keep wanting to get an LG phone and keep buying Samsung - and I guess I'm not the only one.

Sooner or later I guess only Apple (and Samsung because they feel like it) will be making smartphones. Seems no one else can make money on them.
Dunno bout your region but brands like XIaomi,Oneplus,Oppo,Vivo are thriving in my region. Xiaomi even overtook Samsung.