LG Electronics: Retire from “mobile phones” and enter “cars”

Foreign media: LG became the first major smartphone brand to withdraw from the market.

Yonhap News Agency reported on April 5 that LG Electronics said on the 5th that the company finally decided to withdraw from the mobile phone market and completely stopped the production and sales of the mobile (MC) business unit. Its mobile phone business will end on July 31.

LG Electronics said that in the case of increasingly intensified industrial competition, the company’s mobile division performance continued to slump, so the decision was made. The company will devote itself to improving the quality and efficiency of internal resources, focusing on the development of core businesses and restructuring the business structure.

Previously, LG Electronics announced on January 20 this year that the time has come to judge the current and future competitiveness of its mobile phone business and make the best choice, and the company is discussing the direction of future business operations.

After 26 years, LG mobile phone ushered in the finale today.

1. Be among the top three in the world

South Korean technology giant LG Electronics entered the mobile phone market in 1995.

At that time, the mobile phone market had not yet entered the era of smartphones. LG Electronics, with its unique design, created a number of LG mobile phone “stars” in the past 26 years.

Among them, the series of mobile phones named after desserts are the most popular.

At that time, the LG Chocolate mobile phone used the slogan “I Chocolate U” (translated as: Love Chocolate), and the sweetness of the two Korean girls, together with the sweet smile of Korean girls, was a match made in heaven.

Among the shoddy copycats, LG Chocolate made a hit at the end of the imitation craze with its simple and neat slider design, glossy details, exquisite fiberglass, and exquisite paintwork.

After the successful initial experience in the dark chocolate market, LG Electronics pursued its success and launched the chocolate series of white, pink and red.

Tasting the fruits of marketing, in the design, a red touch-sensitive operating keyboard was added, and in the follow-up promotion, the idols Hyun Bin and Kim Tae-hee were invited to design the slogan “You blush when you touch it”, which became Hit the Internet celebrity machine of high-end white-collar workers.

Then, LG named after dessert and launched ice cream mobile phone.

Both belong to the sweet series, and they also buy from the appearance, but they are different from the chocolate series. First, the LG ice cream phone is a flip phone, and second, the latter mainly focuses on the workplace.

In addition to the smooth workmanship of the back case and the colorful screen, the most refreshing thing is the LED light behind the flip cover. When information arrives, the LED light group hidden under the pink translucent phone case lights up, forming a playful and lovely expression (at that time called emoji), and will change with the situation.

“Chocolate”, “ice cream” and other series of mobile phones have swept the Chinese market.

In 2008, LG mobile phone sales exceeded 100 million units; in 2013, its market share entered the top three in the world, becoming the world’s third largest mobile phone manufacturer, second only to Samsung and Apple.

These last opportunities before the advent of the smartphone era that LG seized, and LG, which has been subverted after reaching the top, began to decline.

With the strong rise of Chinese mobile phone brands, LG has been losing ground since 2015.

According to relevant media reports, LG has gradually disappeared from the Chinese market since 2016.

According to LG’s 2017 annual financial report, LG’s mobile division, where LG’s mobile phones are located, suffered serious losses.

LG’s mobile phone sales in 2017 were 13.9 million units, which continued to decline by about 1% compared to the total in 2016. Its mobile division posted a loss of $190 million in the fourth quarter and has since increased year by year.

In 2018, LG mobile phone officially announced its withdrawal from the Chinese market and canceled the high-end series.

In 2019, LG outsourced mid-to-low-end mobile phones, and at this time, LG had a signal to give up the mobile phone business. According to Counterpoint’s data for the second quarter of 2019, LG’s decline has reached 18.5%, which is far behind most mobile phone brands.

In 2020, LG’s mobile phone performance has not shown any signs of recovery.

According to Counterpoint data, in the third quarter of 2020, LG’s mobile phone shipments were 6.5 million, down from 7.2 million in the same period in 2019, accounting for only 2% of the global mobile phone market, while Samsung’s shipments in the same period Nearly 80 million units, 12 times that of LG.

In January of this year, LG released a video of its first concept phone with a scrolling screen, and planned to launch it within the year, but the project has since been shelved.

From the second quarter of 2015 to the fourth quarter of 2020, there have been 23 consecutive quarters of losses, and the cumulative loss has reached 29.1 billion yuan.

In the fierce market competition, LG mobile phones are gradually eliminated.

After a huge loss, it is helpless to sell oneself.

It is reported that LG Electronics has considered a variety of options, including selling its business. After LG Electronics released an adjustment plan including the sale of its mobile business on January 20, it has negotiated with Vietnam’s Vingroup Group Corporation (VIC), Germany’s Volkswagen and other companies about the sale. .

However, it was difficult to reach an agreement with potential buyers on the issue of smartphone-related technology patents. Negotiations with some potential buyers ended in failure, and they finally decided to withdraw from the smartphone business.

2. The revival of sailing

LG said in a statement that exiting the highly competitive field of mobile phones will allow LG to focus on growing areas such as services and platforms for electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and To B solutions.

Among them, on December 23, 2020, LG Electronics and Canadian auto parts manufacturer Magna announced that they plan to invest US$1 billion to establish a joint venture to produce electric vehicle parts.

Magna will hold a 49 percent stake in the joint venture, while LG Electronics will hold the remaining 51 percent, LG Electronics said in a filing.

The joint venture, tentatively named LG Magna e-Powertrain, will manufacture electric motors, inverters, on-board chargers and Electronic drive systems at plants in Incheon, South Korea, and Nanjing, China, the company said.

The transaction is expected to close in July 2021.

It is reported that LG Electronics has a leading position in 4G LTE and 5G patents. According to data from a patent consulting firm in the United States, LG Electronics has obtained the most LTE and LTE-Advanced patents in the United States for five consecutive years from 2012 to 2016.

Magna is an auto parts supplier with expertise in vehicle engineering and OEM manufacturing. Its product capabilities include manufacturing body, chassis, exterior trim, seats, powertrain, electronics, autonomous driving assistance, mirroring, locking and Roof systems, with electronic and software engineering capabilities in multiple areas. The company is a supplier to Tesla, supplying Tesla with interior panels.