LG mobile phone business failed due to lack of software innovation

Hangs on hardware and doesn’t give consumers a good experience
LG’s rollable release of’winning number’ is also unknown, negative in the market

LG Electronics, which once became the world's third-largest mobile phone manufacturer, suggested withdrawal from the smartphone business.  Analysts say that such a situation is due to the failure to innovate software due to hardware-hungry, which does not give consumers a good experience.  Photo = Yonhap News
LG Electronics, which once became the world’s third-largest mobile phone manufacturer, suggested withdrawal from the smartphone business. Analysts say that such a situation is due to the failure to innovate software due to hardware-hungry, which does not give consumers a good experience. Photo = Yonhap News

[시사경제신문=정영수 기자] LG Electronics predicted a major change in the mobile business, including smartphones. This includes all the possibilities, including sale, separate sale, and absorption and integration into other business units.

It is a painful pain to clean up the smartphone business, which is the core of the 4th industrial revolution. Smartphones are the hub of a hyperconnected society where all devices, data, and people connect and communicate with sensors. However, it is difficult to neglect the situation where the deficit has continued for 23 consecutive quarters and the cumulative operating loss reached 5 trillion won by the end of last year.

LG Electronics’ first mobile phone was’Hwa Tong’, which was introduced in 1995. It has 25 years of mobile phone manufacturing history. In 2005, Chocolate Phones, which sold 10 million units worldwide, followed by Shine Phones and Prada Phones, climbed up to become the world’s third largest mobile phone manufacturer. However, with such glory behind, various analyzes of the cause have been raised as they are on the brink of withdrawing the smartphone business.

It is the norm that LG Electronics’ mobile phone business began in 2010. When Apple released the iPhone in 2007, the smartphone era came, but LG Electronics turned away from the trend. From 2009, the popularity of smartphones in Korea increased, but LG Electronics was still holding on to feature phones.

Feature phone is a term developed to distinguish it from smartphones after the rapid increase in smartphone users. This product, which was also called a folder phone, is a mobile phone that can not only make calls, but also text messages, cameras, Internet, and games. However, feature phones are inevitably different from smartphones that have evolved to a computer (PC) level.

In particular, from 2007 to 2010, LG Electronics has been criticized for neglecting to strengthen its technology through R&D while focusing on marketing. This is a completely different aspect from rival Samsung Electronics. Samsung Electronics has waged a war without gunfire for years over the smartphone and tablet markets with Apple. It was Apple that came out with the iPhone, but Samsung Electronics started a chase strategy with the Galaxy series ahead.

Samsung Electronics surpassed Apple in 2012 and rose to the top of the global smartphone market. In 2010, it ranked fourth after Nokia, Apple, and Rim with an 8.0% market share, but it exceeded the 30% market share in two years due to the popularity of Galaxy.

LG Electronics belatedly launched the Optimus series, starting with the Optimus Q, but the reaction was cold. It is that the originality seen in the chocolate phone and Prada phone on LG Electronics’ smartphone has disappeared.

In August 2013, it abandoned the Optimus brand and put’G’ on the front. The evaluation of the G3 launched in May 2014 was positive. However, it was not strong enough to break the barrier of smartphone market share established by Apple and Samsung Electronics.

The G4, which chose natural leather as the cover material, caused a heat problem, and the G5, the first modular product, caused a flare. The V10 with two cameras on the front and the V20 with audio features didn’t work. Although it is peculiar, most of them were evaluated that they did not know whether it is a technology that consumers really need.

From 2019, differentiated products such as the LG Wing with a horizontal screen and the LG V50S dual screen that can be used with two smartphone panels were released, but the situation could not be reversed. Premium phones have not surpassed Apple and Samsung Electronics, and in the mid- to low-end market, they have fallen behind Chinese brands.

In particular, the release of the LG Rollable, which was launched as the last number of matches, is also unknown. LG Rollable’s feature is that the screen that was rolled up in the form of a general smartphone in the form of a bar is unfolded and provides a wide screen like a tablet PC.

However, it is observed that the possibility of the LG Rollable, which received the highest innovation award in the mobile device category at CES 2021, will be released on the market is not high. It is said that there is no reason to focus on product development in the context of suggesting the withdrawal of the smartphone business. This observation is also supported by the fact that the release schedule is gradually delayed from March to June and the second half of this year.

It is pointed out that the situation in which LG Electronics, together with Samsung Electronics, which constitutes the two pillars of Korea’s electronics industry, can collapse the mobile phone business, which has invested tremendous resources by gathering company-wide capabilities, is because it has neglected software innovation by hanging on hardware. It has failed to give consumers a’good experience’.

A good experience that will lure consumers can be realized through the harmony of software and hardware, and it is wrong to think that hardware alone can satisfy consumers’ needs.

In fact, it is pointed out that this problem is not only LG Electronics’ smartphone, but also a chronic disease of the Korean manufacturing industry as a whole. Although Korean manufacturers make things meticulously and conveniently, they tend to neglect the software that gives life to them, and it is impossible to increase industrial competitiveness without innovating them.

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