We had been living the COVID-19 pandemic for a year when, in April 2021, LG confirmed what had been expected for some time. The company announced it would pull out of the smartphone market after 23 straight quarters of losses in the sector.
But how did a company that became the third largest in the world in smartphone sales get to such a point? There were several factors, as always, but one was quite emblematic: the failure of the LG G5 cell phone, a modular phone with a considerable design flaw.
LG’s history with smartphones
LG had problems at the beginning of the ‘Smartphone Era’, when it initially opted to use Microsoft’s Windows Phone operating system. But it didn’t take as long as Nokia to change course and switch to Android.
In 2010, the company took advantage of still weak competition in the smartphone market and already occupied the third position globally, behind Apple and Nokia. That same year, it announced that it would start working with Google’s operating system, with the aim of jumping from 117 million units sold in 2009 to 140 million.
Everything was going well, and LG gained a good share of fans with the G line, especially the G3 and the LG G4. Both were quite successful, mostly from critics — despite not being perfect phones, of course.
Interestingly, the South Korean company was already suffering losses when it launched the G4. The top-of-the-line smartphone was launched in a year in which the company began to deal with revenues lower than investments. And even entering the intermediary market did not help much.
In 2017, the K line already had a captive audience in Brazil. I participated in the launch of K10 Novo in Brazil. The name caused a good deal of confusion, as only the word “New” was added to the successor to the well-received LG K. They were good devices in the mid-range segment.
Why LG went offline
As I already mentioned, there are several factors that led the South Korean to leave the smartphone market. Among them, there is the issue of hardware repetition in the K line models, which year after year brought some visual innovations, but little in hardware. The Helio P22 and Helio P35 chips were used extensively by the company for several generations.
But it wasn’t just the intermediaries that brought outdated hardware. Even the LG G4 had the Snapdragon 808, when the 810 already powered the competitors. And this was repeated a few more times, including the LG G6, which innovated with the ultrawide camera, but had the Snapdragon 821, while the Galaxy S8 already had the Snapdragon 835 (in some regions).
However, I believe the company’s biggest downfall was the modular G5. Launched shortly before the Moto Z line, the LG cell phone featured a design that allowed the user to change a module. But it wasn’t very simple: you had to turn off your smartphone to do this. Motorola got it right with the magnetic modules on the back, with a much more hands-on approach than LG’s.
Then, the LG G5 cell phone stopped making sense. Why buy a cell phone that needs to be turned off to change the module if you have one as good as — thinking about hardware — that just connects and disconnects a magnetic module? And without having to restart to recognize. The G5 was a failure.
attempt to rebuild
This forced the South Korean company to stop everything it had researched and developed for the G5 successor. And racing against time to recalculate the route in time to arrive with a competitive G6. It would have been right, were it not for the use of the outdated Snapdragon. Or at least charged a lower price for the device.
Yes, because the LG G6 is an excellent cell phone. And it had an extra ultrawide camera while most still only had one sensor on the back and one on the front. The Snapdragon 821 is not a bad processor. But the whole set having the same price as a Galaxy S8 made many people opt for the competitor.
In addition to the processor, there was the issue of the screen. OLED technology was already present in Samsung models, while LG insisted on IPS LCD. The G8, released two years later, was LG’s first OLED screen phone.
And then, the company that was already starting to record losses when, in theory, it was still at its peak, began to accumulate quarters without profits. Until it reached the point where, in 2021, it decided to leave the dispute of a competitive market. Remembering that we also saw the rise of Chinese companies in this period, which only aggravated the LG crisis.
