It’s fair to say that 2016 wasn’t kind to LG.
A misstep in presuming consumer appetite for modular handsets left the
company’s financial and sales figures in a rather woeful state.
The
electronic giant’s market share dropped further still behind top dogs
Apple and Samsung. It was a low point for the company’s smartphone
ambitions.
LG clearly looked to turn its fortunes around this year. It
didn’t disappoint, producing two flagship smartphones that won the
company back many fans, and made a few new ones. In our opinion, they’re
some of the best handsets produced this year, but were they been enough
to turn the company’s fortunes around?
The year that was (2017)
The LG G6, announced back in February,
was clearly a departure from 2016’s modular miscalculation, actually
beating Samsung to the announcement of an ultra-thin bezel phone with
18:9 aspect ratio display. It was a much needed redesign, which
reaffirmed LG’s intentions as a premium-tier brand that doesn’t rely on
gimmicks, and built on the company’s much sought after camera and video
capabilities.
The LG V30 further
honed this new design, providing more powerful processing hardware, new
video shooting options, and pretty much all the bells and whistles you
could want from a power user sized flagship smartphone. The handset also
marked LG Display’s return to the mobile OLED panel market, after
experimentation with flexible POLED back in the G Flex days. LG Display also ended up providing QHD OLED panels for the Google Pixel 2 XL shortly afterwards, finally providing the industry with an alternative supplier to Samsung.
Notable achievements haven’t just been limited to LG’s premium tier of products either. The LG Q6 series
brought the same sleek looking design to a much more affordable price
range by the middle of the year. It’s just a shame the processing
capabilities didn’t pack in a little more grunt and that other key
features were missing.
The LG G6 and V30 are some of this year's best reviewed smartphones, but the company's mobile division is still losing money.
Unfortunately, this praise hasn’t seen LG’s mobile division swing back into a profit — yet. At the last count,
the company’s mobile division recorded a loss of $331 million, although
it saw a slight profit of £3.2 million back in Q1, right after the
launch of the G6. On the plus side, the company’s revenues for Q3 were
up 13 percent over the year before, and smartphone shipments leapt by 44
percent. But after the LG G5’s dismal performance the year before, it’s
still not a great picture.
The long term trend for LG’s mobile sales remains remains in
decline. The company shipped 13.7 million handset as of Q3 2017, down
from a peak of 59 million back in 2014. In terms of global market share,
LG doesn’t even feature in the top six anymore, having recently lost its spot to Chinese manufacturer Xiaomi.
In a bid to remedy this situation next year, LG recently shuffled some of its management positions.
Hwang Jeong-hwan has been appointed president and CEO of the LG Mobile
Communications Company, replacing the departing Juno Cho. Previously,
Hwang oversaw research and development at LG’s more profitable Home
Entertainment businesses. Apparently, Hwang was also closely involved
with the development of LG’s early smartphones, so this move appears to
be an attempt to revisit the company’s routes and recapture some of its
early innovative spirit in mobile.
LG Display’s contribution to the Pixel 2 XL has been a mixed bag for the company.
Outside of poor business results, LG’s mobile business hasn’t been without its fair share of controversies this year either.
The arrival of the LG G6 disappointed some, as it missed out on
cutting edge Snapdragon 835 processing technology in favour of the
previous generation Snapdragon 821. Although to be fair this was due to
availability issues outside of LG’s control. More upsetting was the
decision to limit wireless charging and superior audio components to
certain markets, leaving some fans to feel they’d be missing out on the
true G6 experience.
Limiting high-end features to certain regions was a sore-spot with the G6 that we hope won't be repeated with the G7.
More recently, the OLED panel inside the Google Pixel 2 XL caused
arguably more uproar, heaping additional scrutiny on the V30 too. With
reports ranging from common blue tints, right through to grainy
appearances and very fast burn in, Google’s 2017 flagship smartphone and
LG’s reputation as a leading display company have taken a hit. LG
Display’s return to the mobile market hasn’t been as smooth as the
company would have liked.
The year to come (2018)
We’re already fast approaching the launch of LG’s next flagship.
Following the company’s usual launch pattern, the successor to the G6
will likely be unveiled in just a few months, or perhaps even earlier.
This handset presents LG with an opportunity to fix the shortcomings of
the G6, such as global hardware parity. It’s also unclear whether we’ll
see another major revision of the company’s design with even thinner
bezels, or if the G6’s successor will be a more conservative revision of
the G6.
An LG spokesperson just recently confirmed the
company is ditching the G-series branding in the future. The G6 will
still have a successor, but it won’t be called the LG G7.
The company is reportedly looking beyond mobile next year to virtual reality. LG is working with Valve on a new virtual reality headset, though it will be tethered to a PC to power it, just like the HTC Vive and Oculus Rift,
and so won’t be a rival to Samsung’s Gear VR range, which pairs with a
smartphone. We’re still waiting on an official launch window, which is
currently rumored to be scheduled for sometime in early 2018.
Of course, neither of these are guaranteed to boost the company’s
sales. The virtual reality market has some well established players
already, but it’s still waiting on that must-have experience to drive
meaningful sales. In the mobile space, LG is fighting to gain ground in
emerging markets, compete in China, and perpetually under threat from
cost effective flagships in its more established markets like the U.S.
and South Korea.
Diversity may be key in 2018. LG is working on a VR headset with Valve and is already a notable player in the smart appliances market.
LG may have more success with the smart home market, in which its SmartThinQ and ThinQ
appliances are already well positioned. However, it remains to be seen
if the company has a plan to unify these products with mobile
internally. LG is playing nice with compatibility with Google Assistant
and Alexa for smart home, and doesn’t appear to have any ambitions to
launch a rival assistant, along the lines of Samsung’s Bixby.
Summary
LG is still recovering following the rise of China’s cutthroat
OEMs, and the resulting price and hardware squeeze which hit all but
Apple and Samsung. While the G5 may have been a knee-jerk overreaction
to the need to innovate and counteract this market shift, the G6 and V30
are clearly more refined and well-thought-out revisions to LG’s
successful smartphone formula. The company is showing signs of turning
its situation around, but there’s still a long way to go in terms of
sales and market share.
LG isn’t alone in this unfortunate situation. Other legacy
manufacturers, including Sony and HTC, face similar issues with
profitability and market share, despite producing top-notch smartphones.
However, LG has shown more willingness than most to adapt its designs
and innovate, so perhaps 2018 will see a further recovery for the
company
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