Things LG Electronics should give up when it closes its smartphone business

As known, LG Electronics is considering withdrawal from the mobile division. If LG disposes of the smartphone division, what will LG lose? If you look at the examples of other companies, you can understand the impact of the withdrawal of the smartphone segment.

Why Sony keeps making smartphones

If there is LG in Korea, there is Sony overseas. Sony ranks third in Japan as of 2019. Apple is in the first place, and Sharp is in the second place. Sony is also being evaluated as to whether it is folding its smartphone due to the continued deficit in the smartphone division.

In an interview with CNBC in 2016, Sony said, “We have no regrets about Sony ranking first or second in the current smartphone era.” “In the future, when a new paradigm shift begins, we should be able to lead the change immediately. Has been announced. In 2019, Sony even consolidated its smartphone division, which is losing money, with the consumer electronics division. In response, foreign media speculated that Sony, which lost more than 1 trillion won (about $940 million) in 2018, was intended to hide the department’s performance in the integrated department.

The difference between LG and Sony is that Sony has been making great phones anyway. In particular, in the software sector, Sony is not lacking compared to other famous manufacturers. In addition, like Samsung, Sony runs several departments related to smartphones. For example, when Samsung made an Isocell camera with 180 million pixels, Xiaomi and other manufacturers who ordered Isocell cameras mainly used Sony’s 64 million or 48 million pixel lenses to respond to consumers’ high-definition lens needs.

In the video and audio technology, there is a need for Sony to continue making smartphones. Sony’s flagship smartphone, the Xperia series, has been doing a lot of research on imaging technology and producing good results. Since Sony is also a movie company that owns the copyright for the’Spider-Man’ series, users will be interested in how to consume videos on their smartphones. In addition, Sony, which still owns the Walkman brand, introduced a Bluetooth speaker with 360-degree sound, or launched an active noise canceling Bluetooth earphone before Apple or Samsung. Such and other technologies are being developed with smartphones.

Sony also had the 5G era in mind. Unlike communication methods up to 4G, 5G is considered a technology that can change the entire industry. It affects various areas such as automated factories, cloud industries, game streaming, autonomous vehicles, and C-ITS. Therefore, smartphones will have a good effect on obtaining test data on how edge devices (smartphones, cars, etc.) work on the communication network.

In the future, smartphones will continue to be a key device in the communication era. It will work as an OS on most non-smart cars (Android Auto, Apple CarPlay), and it will be the most accessible product when using AR. It is a speaker, a handset, and a tool to use a messenger. It is also a credit card, point card, and bankbook. It is a YouTube and Netflix machine, and it becomes a tool to measure the house through a lidar sensor (iPhone 12 Pro). It will be the first device to secure accessibility, and it is also the most convenient device that can issue commands with AI. It is the best device to use and test (voice commands, camera vision AI, AR games, etc.). LG’s abandoning smartphones means that all of this must be developed into a separate area.

Xiaomi’s Mi Home universe

There is another thing that disappears when you give up your smartphone. It is an IoT control device. Most IoT devices are the easiest and most convenient to operate with a smartphone. Even Google’s voice command, which has an OS, can be operated more easily from an Android phone other than Google Home. Thanks to portability.

Even if you hit your smartphone, you can control IoT devices through Google Assistant. However, it is difficult to integrate into the OS interface. For example, without executing a voice command, it becomes impossible to touch it directly in the notification center. In fact, Android is fragmented enough, and the IoT ecosystem is fragmented as well. Therefore, it may not be necessary to purchase smartphones and home appliances under the same brand. The reason why the Galaxy series is selling well is difficult to find a direct relationship with the sales volume of home appliances.

There is an Android phone maker that has done this nicely. It’s Xiaomi. Xiaomi started out as a company that made iPhone copy cost-performance phones, but now it sells more consumer electronics. We are making enough smartphones too, and IoT services can be run on two levels. For example, on Xiaomi phones, you can operate Xiaomi appliances through an interface integrated into the OS. On other smartphones, home appliances can be operated through the Mi Home app.

The difference between Xiaomi and LG is that most of Xiaomi’s home appliances are cost-effective. It means that you are guaranteed convenience while buying at an affordable price. However, most LG products are premium products. If LG gives up its smartphone, it is a premium product, but in the IoT sector, it may result in lower than that of Xiaomi.

Ultimately, there is a difference in capabilities between Xiaomi, whose CEO is an engineer, and LG, which continues to select representatives in the home appliance sector, of producing software for mobile. Xiaomi is making great progress in the IoT sector, even releasing an embedded software platform SDK that can be used in other OSes. LG is not expected to have this capability. You may realize how inconvenient the IoT function of LG home appliances, which requires direct commands, compared to Xiaomi home appliances that will return to automation through the location of the smartphone after several years have passed.

To see how important interfaces and ecosystems are, think of Apple. When we hear the news that Apple is making cars with other manufacturers, the reason people get excited about it is because they understand how well Apple makes the ecosystem and usability. Just because Apple makes cars with Hyundai, does Apple make the whole car? “Apple Isn’t Building a Car. It’s Building Its Guts,” Motortrend said. Let’s imagine that Apple’s brand, usability, and ecosystem are intertwined with inexpensive cars made by Hyundai. There must be reason for people to be enthusiastic.

Will LG really sell the smartphone segment?

LG has come up with great answers like’Rollable’, but it’s true that there are doubts about whether it can continue to attract these innovative devices. The G5, which is released in a modular form and can be replaced with parts, received great response from foreign media, but the G6 product was not compatible with G5’s modules at all. Motorola’s Moto Z4, which appeared at the same time, is still different from that used as an active phone.

And there is also a problem that the deficit is too large to continue to bear the above advantages. LG Electronics’ smartphone division recorded a loss for 23 consecutive quarters, with a total loss of 5 trillion won. So it’s understandable to just give up your strengths.

As a result of LG Electronics confirmation, it is not confirmed that it will sell the smartphone division. LG Electronics is in a position that it “reviews all open possibilities” such as sale and maintenance. Therefore, he is also considering making a smartphone. He said that the rumors to take over a Vietnamese company in the market were not true.

Written. Byline Network
<이종철 기자> [email protected]