Tag: LG

Why LG killed its phone business

By Lisa Eadicicco for Business Insider US

LG is officially bowing out of the smartphone market.

The South Korean tech giant announced on April 5 that it’s exiting the “highly competitive” smartphone business by closing its mobile unit, signaling the end of an era for a company that was once a top-tier handset maker.

The decision underscores how difficult it is to compete with industry giants like Samsung and Apple, particularly in the United States which is part of the world’s third largest smartphone market.

LG was once among the top five smartphone makers in the world. However, it failed to stand its ground.

Worldwide, Apple took the number one spot in the fourth quarter of 2020 with 23.4% of the market while Samsung came in second with 19.1%, according to The International Data Corporation.

Samsung and LG are longtime rivals in the electronics and home appliances industries, but there’s one critical advantage the former has that the latter lacks when it comes to smartphones.

Samsung established itself as the primary competitor to the iPhone when the smartphone market was still fairly young in 2012. Back then, it had a blockbuster hit on its hands with the Galaxy S3, which overtook the iPhone 4S to become the world’s best-selling smartphone in 2012, according to Strategy Analytics.

The Galaxy S3’s successful launch helped shape a narrative that the smartphone market had become a two-horse race between Apple and Samsung. It fuelled headlines in outlets like The New York Times, Vanity Fair, and The Guardian declaring the two tech giants as the winners of what had become the biggest shift in computing in recent history.

No Android phone maker had anything that came close to the popularity of the Galaxy S3 at the time. It put Samsung’s Galaxy S series on the map, setting it up to be the iPhone’s main competitor for years to come.

And despite being more innovative in some ways, other Android phone makers simply couldn’t keep up. For example, tech critics praised HTC in 2013 for its eye-catching One M7 phone, which outpaced every Android phone on the market in terms of build quality and design. But it never had the sales to match those accolades, and HTC sold a chunk of its smartphone business to Google in 2018.

Motorola’s original Moto X from 2013 was also ahead of its time with hands-free voice controls that preceded the Amazon Echo and was well-received by reviewers. But Google sold off Motorola’s mobile unit to Lenovo 2014, and the PC giant has struggled to boost its presence in the smartphone market.

Even Google, which operates Android, has had a hard time breaking into the smartphone business. It pivoted to selling less expensive Pixel smartphones after it had trouble selling high-end phones designed to compete with the iPhone and Samsung’s Galaxy S line.

LG took a similar path. It was ahead of competitors in some ways, such as its decision to bring cameras with a wider field of view to its smartphones years before Apple and Samsung did. But its smartphone division has incurred losses totalling $4.5 billion over six years, resulting in the decision to shut down the unit after it reportedly failed to find a buyer. LG will instead focus on areas like smart home devices, electric vehicle components, robotics, and artificial intelligence.

Of course, the success of Samsung and Apple is just one element that’s influenced the market for mobile phones, albeit a big one. Popular Chinese brands that have stood out for their more accessible price points like Huawei, Xiaomi, Oppo, and OnePlus also rose in popularity around the time that LG’s market share began slipping around 2015, as Gartner data provided to Insider indicates.

Still, Samsung and Apple have been comfortably at the top of the smartphone market for years, and LG is just the latest casualty.

 

Source: BBC

LG has pulled out of one of the world’s biggest tech shows citing fears over the spread of coronavirus.

The South Korean tech firm has cancelled its appearance at Mobile World Congress (MWC), which is held every year in Barcelona.

MWC opens on 24 Feb and is the world’s largest mobile-focused tech expo.

China’s ZTE has also dropped plans for a press conference at the event due to the illness, but it will still host a stand.

Separately, Sony has said coronavirus could negatively affect production in its factories, which make components for Apple and Huawei products.

Telecommunications trade body the GSMA, MWC’s organisers, said of the virus yesterday: “There is minimal impact on the event thus far”. However, within hours, LG announced it was pulling out.

“With the safety of its employees and general public foremost in mind, LG has decided to withdraw from exhibiting and participating in MWC 2020 later this month in Barcelona, Spain,” LG said in a statement.

“This decision will prevent needlessly exposing hundreds of LG employees to international travel, which most health experts have advised.”

The firm added that it would hold “separate events in the near future” instead.

“You have to say it’s probably an entirely sensible response given the situation,” said Simon Forrest, tech analyst at Futuresource.

To date, there has been just one confirmed case of coronavirus in Spain.

No handshakes
“We have spoken to LG and regret not seeing them at this year’s MWC20 Barcelona,” a spokeswoman for the GSMA said.

She added that MWC was still due to proceed as planned.

Previously, the GSMA organisation said it had taken extra precautions for this year’s conference, including putting in place a “no-handshake policy”, as well as increased cleaning and disinfection, and the provision of more sanitising materials for public use.

“They have to be taking this seriously,” said Mr Forrest, who is currently planning to attend MWC himself.

There was confusion after multiple tech sites reported that Chinese tech firm ZTE had followed LG and also pulled out of MWC.

Spanish newspapers El Pais and La Vangardia said ZTE told them it would not host a press conference that had originally been scheduled for 25 February.

ZTE then published a statement saying that the firm’s appearance at MWC would go ahead “as planned”

A spokeswoman told the BBC: “The handset launch event is cancelled – but the product will be demonstrated at the booth.

“There is no other change, no other cancellations.”

A spokeswoman at the GSMA appeared to be unaware of ZTE’s press conference decision, and denied that it had been cancelled.

There have been more than 24,000 cases of coronavirus in China to date but only a handful of cases – by comparison – elsewhere in the world. Globally, nearly 500 people have now died because of the virus.

The UK Foreign Office has advised all British citizens to leave China if they can.

Virus versus sales
Hon Hai, the Chinese manufacturer which produces iPhones for Apple, has cut its sales forecast for the year, thanks to the spread of coronavirus.

This is because the virus may affect supply chains in Asia, where factories make components and hardware for tech firms around the world.

Hon Hai’s chairman told Bloomberg that he expected sales growth between 1% and 3%, rather than a previously projected 3-5%.

And Sony, which also produces components for Apple and other tech firms, including Huawei, told investors on an earnings call that coronavirus may also affect its production lines for image sensors.

Although the firm raised its overall revenue outlook for the year, chief financial officer Hiroki Totoki said: “We cannot deny that our production and sales supply chain for the image sensor and electronics business could be affected enormously.”

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