Whether or not the exit from China is true, it is just a formality, the breakup is an established fact. LG’s mobile phone has long faded out of the sight of Chinese users, only a small number of enthusiasts and some loyal fans are still following its trail, so that many users sent out a question “LG is still making mobile phones” after hearing this news. I do not know whether anyone will think of it at this time had glorious days.
What was once glory: “Chocolate” lifted LG to the top three
Like the fallen Nokia and lenovo’s MOTOROLA, LG had a glorious time dominating the Chinese market, making impressive achievements in the 2G and 4G eras.
In the era of 2G feature phones, domestic mobile phone brands were unknown. The Chinese mobile phone market was surrounded by overseas mobile phone brands such as Nokia, Samsung and SONY Ericsson, and LG also enjoyed a high popularity in the high-end mobile phone market.
Unlike later, LG attached great importance to the Chinese market at that time. Its popular “Chocolate” phone series was launched in China in 2006. LG has also been very diligent in promoting its “chocolate” mobile phone. Not only has it actively explored the offline market, but it has also launched advertisements with popular stars Hyun Bin and Kim Tae-hee. I believe many people still remember the slogan “I chocolate You” for its “chocolate” mobile phone series.
Within a year, the mobile phone appearance fashion, the price is high, has taken on many design awards, including the iF the “chocolate” series of mobile phones, in the Chinese market sales of 600000 units, about 20% of the LG that year mobile phone sales in China, sales accounted for 40%, is send LG to high-end mobile phone market, help LG in the CDMA market in the first three.
LG has been on a roll ever since, breaking into the top four global handset makers in 2008. In 2009 it further became the world’s third-largest handset maker, behind Nokia and Samsung. The subsequent release of “ice cream” series of mobile phones has also been deeply loved by some Chinese users.
In the era of 4G smartphones, South Korea is the first country to deploy a nationwide commercial 4G network. Korean phone manufacturers Samsung and LG have unique advantages. LG is in the lead in LTE baseband technology, which has obtained more patents on 4G technology than chips. According to data released by TechIPM, a U.S. patent consulting firm, LG Electronics has the largest share of LTE standard patents in the world among LTE patents registered with the U.S. Patent and Trademark Office (USPTO) and The European Patent and Trademark Office (EPO) as of January 31, 2014.
At the same time, LG pays more attention to the design innovation of mobile phones. Although high-end mobile phones are not popular later, they have always attracted high attention in the industry, which shows that users have high expectations for their mobile phone brands. LG did have some cutting-edge designs, such as the world’s first smartphone with 3GRAM, the first camera with laser focus and the first F1.6 wide-aperture camera; The modular design of the G5; The now-popular 18:9 screen, for example, was actually first adopted by LG phones, but Samsung stole the show.
The decline of LG’s mobile phones is similar to that of its screens. There were some bright spots, but the company experienced a brief boom after losing popularity due to its inferior performance and excessive defects.
Losing ground: Errant LG phones left behind by The Times
LG Electronics reported heavy losses in its mobile division in 2017, with a loss of $190 million in the fourth quarter of 2017. The company sold 13.9 million phones in 2017, down 1% from 2016. In fact, since the second quarter of 2015, LG’s mobile phone business has started to decline and continues to decline, losing money for three consecutive years. LG’s decline had external causes, but it was more internal, with product flaws and bad strategy causing LG to lose its former glory and fall behind.
First of all, the domestic mobile phone started late. Although it was unknown in the 2G era, it continued to make headway in the 3G era. Domestic mobile phone manufacturers seized the 3G era, Android system, the Dividend of the Internet, plus the sentiment card bonus points, heavy marketing, market share increased step by step. In the past, domestic mobile phone manufacturers, who could only buy patents, focused on technology and gradually narrowed the technological gap with overseas mobile phone manufacturers. Huawei alone contributed 755 patents that year, ranking 48th in the list of TOP50 companies authorized by patents in the United States in 2014. On the other hand, Chinese consumers are less enthusiastic about Samsung and LG phones due to the THAAD issue and the ban on Korean phones.
Moreover, unlike the glory of the 2G era and the lead of the 4G era, LG phones can be said to have missed out on the 3G smartphone era in China, which also laid the groundwork for the subsequent decline. While China’s mobile phone market has begun to transform to smart phones, while other mobile phone manufacturers have begun to develop smart phones, LG still insists on producing feature phones and only pursues perfection in appearance. Data shows that in 2009, LG launched 40 new products, smart phones accounted for a minority, and this situation lasted for two years. In 2010, LG planned only one smartphone for the Chinese market.
When LG’s slow nerves came to a head, it made the same mistake as nokia. LG also chose Microsoft’s Windows Mobile6.5 and OMS, led by China mobile, as the operating system for smartphones instead of android. Two consecutive misjudgments have led LG to miss the golden age of 3G smartphones in China.
Secondly, LG phones innovation and design though laudable, but the quality control is rather go heart, quality process has many defects, the user’s complaints has been gradually built the appreciation for the design, such as “chocolate” mobile phone series frequent restart, crash, G2 is the most common touch screen is broken, the bottom of the G3 microphone cracking problem…
The problem of poor battery life of mobile phones, which has existed since the era of feature phones, becomes more obvious in the era of smart phones. Heavy use can only last about two hours, while domestic mobile phone manufacturers have long been able to achieve “five minutes of charging and one hour of talking”. LG’s withdrawal from China has prompted many users to complain about the quality of LG’s mobile phones and express disappointment with the brand.
Finally, LG late degree of attention to the Chinese market also gradually reduced, less advertising, new start is no longer in China, and the two wrong judgment: to imitate the samsung use directly, in order to cut costs drastically cut offline channels to retain only the online channel, and then, millet mobile phone manufacturers such as huawei to a line.
Under the action of the above reasons, LG mobile phones, though still have attention, but the sales slump, qualcomm and other suppliers are not willing to provide the latest product to LG, lead to LG’s flagship machine always less than the section on performance, and performance is one of the threshold of the flagship machine, poor performance and snowball rolling again cause LG mobile phone market recognition.
Data from market analysis firm Canalys shows that quarterly shipments in China’s smartphone market have fallen by 4% year on year. The Matthew Effect is intensifying, as the strong get stronger and the weak find it harder to survive. LG’s market share in The Chinese mobile phone market is less than 1 percent, and it has lost the opportunity to rise.
LG has never officially announced its departure, but its actions indicate that it is gradually abandoning the Chinese market, with offline retail stores disappearing one after another, few platforms selling LG phones online, and only a few models sold in China. The G5 may be the swan song of the Chinese market. At this point, once the world’s top three also only Samsung still have a voice.
LG’s exit from China leaves other overseas markets vulnerable
China is the world’s largest mobile phone market, but North America is LG’s largest market with 45 percent, followed by Latin America with 20 percent. But LG’s phones, which have been losing ground in China, are in equally dire straits in other overseas markets.
Six months ago, LG electronics reached a settlement with its north American customers in a class action lawsuit over the Nexus 5X unlimited restart issue. “Motherboard door” once again reflects the lack of QUALITY control of LG’s mobile phones, and under the influence of this, the once loyal users must have distrust of LG’s mobile phone brand.
At the same time, LG phones in the North American high-end mobile phone market is not as good as Samsung, Apple and other competitive products in cost performance, Millet, Huawei and other domestic mobile phone brands are also actively developing overseas market, Millet has surpassed Samsung to become the hegemony of the Indian mobile phone market, while ZTE and other domestic mobile phone brands have established a barrier advantage in the North American market.
LG’s mobile phone brand has caused a crisis of trust, and it has been attacked in many ways in other overseas markets. Many competitors are squeezing LG’s living space. If it does not make timely changes and improve quality control, it is likely to face the same outcome in the North American and Latin American markets as in the Chinese market in the future.
LG’s way out: Move to low-end smartphones, or wait for 5G?
After the news of LG’s withdrawal from China, it was said that LG would shift to low-end smartphone market and launch a new series of mobile phones, and it was said that LG was waiting for the 5G era and preparing for the development of foldable mobile phones. The patent map of foldable mobile phones has been released. So is moving to low-end phones the way out?
The glory of the LG as ever, feelings and signs may also attract some users to come to consumption, also can solve the problem of insufficient performance compared with competing products, but the low-end phones profit is low, always pay attention to the innovation design of LG if keep going this route still need high investment, so profits are unsustainable, if abandoned design advantages retain feelings powder how? In addition, LG’s shift into low-end smartphones has left it less competitive than rivals such as Xiaomi, which has long focused on cost-effectiveness.
LG’s mobile division has been losing money for years, and a lower-margin shift to lower-end phones will make it hard to introduce foldable phones quickly. Will LG miss the boat again?
Although SONY’s mobile phone business has been losing money for a long time, it still refuses to give up and is still preparing to enter 5G market. However, LG’s development focus is on the home appliance industry. If low-end mobile phone business does not improve in the future, it may give up the mobile phone business and focus on the home appliance industry with profit growth. Therefore, switching to low-end phones is probably not the way out, but strict quality control is.
“We are still doing our best to survive,” says an LG executive.
I hope so, too. I hope it will survive.
Liu Kuang, meditation on the Internet, wechat official account: Liukuang110