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13 Jan 2018

Suffering losses, LG decides not to release smartphones every year

LG to suspend annual smartphone launch cycle

LG Electronics has been struggling with its smartphone business for quite some time now. It now looks like LG isn't going to release smartphones every year anymore.

According to The Korea Herald, at CES-2018, LG Electronics Vice Chairman, Cho Sung-jin, hinted at breaking away from LG's tradition of launching smartphones annually.

He said LG wouldn't have a regular timeline for launching handsets.

Here's more.

In context

LG to suspend annual smartphone launch cycle

Will not launch smartphones just because rivals do: Sung-jin

LG Vice Chairman Sung-jin said: "We will unveil new smartphones when it is needed. But we will not launch it just because other rivals do." He added LG would no longer set a regular timeline for handset releases like it used to do earlier.

LG Electronics may scale down its handset unit


LG Electronics may scale down its handset unit

LG's latest move is likely to help the company's smartphone business that has been reportedly suffering losses consecutively for the last 11 quarters.

Though Sung-jin didn't comment on the mobile unit's financial losses, his announcement does reflect LG's plan to scale-down its handset business amid the slow-paced global smartphone market growth.

Apart from the smartphone unit, LG's appliances and other businesses are flourishing.

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Smartphone Unit

Budget phone sales reduce LG smartphone unit's losses

Even in 2017, LG's smartphone business couldn't recover from financial losses; the unit is estimated to report losses for the October-December quarter last year, too, for the 11th straight time.

Interestingly, however, a majority of its earnings came from budget smartphones and not flagship models. Budget phone sales helped the business by reducing the losses by over 40% year-on-year to $650mn.

LG first launched modular smartphone with swappable hardware parts

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LG first launched modular smartphone with swappable hardware parts

LG's decision regarding its smartphone unit is being seen as its attempt to "shore up" finances. LG flagships are also usually overshadowed by Apple, Samsung, and others.

For example, in 2016, LG was the first to launch a modular phone, LG G5; but Moto Z with "Moto Mods" became more popular.

LG G5 couldn't impress customers as the modular system was poorly implemented.

Modular Smartphone

LG to pull the plug on modular smartphone idea

Meanwhile, Kim-Ki-Wan, Managing Director of LG's India Operations, said they were taking an "internal call" on the future of modular devices. LG is likely to scrap its modular phone idea.

LG G5's successor, LG G6, had no modular design/attachments. However, LG G6 was the first phone to feature a display with 18:9 aspect ratio but with an older Snapdragon chipset compared to its competitors.

LG G7 could arrive soon

LG is expected to launch the G7 soon. The device was reportedly listed on a UK website. It would have Qualcomm's Quick Charge 4.0 but may have a 2017 flagship chipset. Meanwhile, some reports claim LG might entirely retire the G-Series for a "two-digit" series.

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