LG announced the closure of its mobile phone business, still number 3 in terms of sales in the United States. The company will sell its existing inventory of phones such as the LG Stylo 6, LG Wing and LG Velvet, while continuing to provide support and software updates “for a period that will vary by region”.
“LG’s strategic decision to exit the incredibly competitive mobile phone industry will allow the company to focus its resources on growth areas such as electric vehicle components, connected appliances, smart homes, robotics, ‘artificial intelligence and business-to-business solutions, as well as platforms and services,’ the company said in a press release.
The company was reportedly looking for a buyer for its long-losing money-losing phone business, but found no takers.
Among other things, that means LG’s rollable phone will likely never see the light of day. But since LG is a screen maker and supplier to other phone makers, the same technology may appear elsewhere.
LG as a company is not doomed. According to its fourth-quarter earnings release, LG Electronics is making sizable profits in its appliance/air-conditioning and home entertainment businesses, which include its popular OLED TVs. The LG conglomerate also owns other companies, which play an important role in the battery and display markets.
Many Americans know LG for its major role in the mobile phone industry, dating back to Sprint’s Touchpoint 1100 phone in 2000. During the flip phone years, LG had a series of massive hits on Sprint and Verizon, making many of the bestsellers. 2004-2009 era flippers such as the VX6000 and VX8100. LG originally made its mark in the US because, like Samsung, it decided to make a big bet on Qualcomm’s CDMA technology. This made it a major supplier for Verizon, Sprint and their predecessors like Alltel and Western Wireless.
CDMA has created something of a walled garden in the United States and parts of Asia where different manufacturers have thrived compared to the rest of the world. LG, Samsung, Sanyo and Motorola were stronger here than they were in the world; Nokia and Ericsson didn’t want to play CDMA much, so they weren’t as big in the US as they were in the rest of the world. The Chinese phone makers that dominate sales today weren’t on the charts at all.
America was never enough
According to Counterpoint Research, LG is and always has been the third largest mobile phone manufacturer in the United States. In a market dominated by Apple and Samsung, LG has held a 9-13% market share in recent quarters, according to Counterpoint. That’s down from 18% at the start of 2017, but still significant.
In an M Science report we covered in February, while the LG Wing didn’t have a strong performance, the LG V60 ThinQ 5G came out as the most popular 5G phone in the US, selling over 240,000 units. LG’s position is even stronger with prepaid carriers at the lower end of our market. According to a report by Wave7 Research, LG had a market share of over 20% at Metro by T-Mobile in early March, driven by strong sales of the LG Stylo 6.
But LG has faded globally, especially over the past five years, as new, affordable Chinese suppliers have risen. Counterpoint says the company held a 4-5% global market share in 2015, better than OPPO, Vivo or Xiaomi, but fell to 2% by the end of 2020, with Chinese rivals overtaking it with global market shares of approximately 10% each. . This resistance to aggressive new Chinese vendors may be part of what has helped keep LG relatively stable in the US market, even as its role has plummeted in countries where these other companies sell phones.
Will OnePlus and Motorola take over?
LG’s primary role with US carriers was as a trusted partner for affordable phones. The flagship G series has been overtaken here by the cheaper K and Stylo series phones, for example. Especially at Verizon, LG was known for having reliable phones that were easy to certify. In our Reader’s Choice awards this year, however, LG’s phones scored very low on tech support and repairs, and had the lowest “likelihood to recommend” of the major brands.
The elimination of Sprint also killed off one of LG’s key partners, with newly merged T-Mobile seemingly looking to OnePlus as a partner to balance Samsung and Apple. OnePlus now offers phones across T-Mobile’s lineup, from the low-cost Nord N100 to the flagship OnePlus 9 Pro. At Verizon, Motorola and TCL play big roles on the affordable sides of the lineup.
With the end of the business, we no longer recommend LG phones. That’s a shame; I liked their spirit, their creativity and their people.
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