case study- why LG stopped making smart phones?
A report by Korea Herald said that LG CEO Kwon Bong-Seok has informed all the employees via email about its intentions of shutting down the smartphone segment owing to huge losses. The company incurred losses mounting about $4.5 billion (roughly Rs. 32856 crores) in the last five years in the smartphone market making LG take a ‘cold judgement’ said an official.
LG faces fierce competition in its home from Samsung, also a Korean electronics brand in the smartphone business along with several newcomers from China be it Xiaomi, OnePlus, Oppo or Vivo. As 60 per cent of the job holders that have been moved to other segments, the remaining 40 per cent can be retained if the company wants to not completely exit but focus on a few flagship models only. Last year, LG launched two new handsets, the dual-screen Velvet and flip LG Wing handsets with the aim to stand out from the rest in the market.
"It's good that LG decides to exit this business sooner, at least from India's perspective," he added.
In the light of immense competition from Chinese mobile manufacturers, LG has not been able to reclaim its lost market share in India.
LG certainly is bringing more innovation to its smart TV segment.
The company announced the first rollable TV last year and during the CES 2021, it showcased its transparent OLED panel.
"LG has always launched competent smartphones and after Samsung, it has been the only smartphone player that has worked on innovation in shapes and technology, like the scratch-free G6 or the foldable G8xThinQ," said Ramesh Somani, Chief Editor and Publisher, Exhibit Magazine and BBC TopGear India.
"LG never researched on their competitors it was biggest drawback, prises LG used to offer was much high compare to others smartphones company "
"Their exit will be a big loss to the innovative spirit of the smartphone industry and at the same time, their shrinking market share will not make for a business case," he added.
To boost its premium smartphone sales, LG last year launched the Explorer Project.
Under the project, the company released the Wing, a dual-screen smartphone with a rotating form factor.
For this year, LG was scheduled to launch a smartphone with a rollable OLED display.
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