On April 5, LG Electronics announced on its official website that it would close its mobile phone business unit, a resolution that had been passed by the company's board of directors earlier in the day.
It is understood that the specific shutdown time of LG's mobile phone business is set for July 31, 2021, but the inventory of some existing models will continue to be sold. At the same time, even if the related business is closed, LG Electronics will still provide service support and software updates for existing mobile product customers for a period of time.
LG Electronics said that withdrawing from the highly competitive mobile phone market will enable the company to focus its resources on growth areas including electric vehicle components, smart homes, robots, artificial intelligence, B2B solutions and so on.
LG has experienced the rise and fall, and the former giants have no choice but to withdraw
Before the continuous loss, LG mobile phones also had a brilliant era in the mobile phone market.
In 1995, LG Electronics entered the mobile phone market and began to launch LG mobile phones, but it was not until May 2006, when a mobile phone called "Chocolate" was released, that LG mobile phones were able to become popular in the market. At the end of September of the same year, the cumulative global sales of LG "chocolate" mobile phones reached 4 million units, and one year after its launch, global sales reached 10 million units. It became a dark horse in the mobile phone market at that time.
Since then, LG has taken advantage of the chase, chasing Nokia and Motorola. Beginning with "chocolate", LG successively launched a series of mobile phones such as "ice cream" and "lollipops", packaging mobile phones with "dessert" labels, and cooperating with the popular Korean star to become the first choice for young people's mobile phones in that era.
According to the data, in 2008, the sales of LG mobile phones reached 3 billion US dollars, and the cumulative sales volume exceeded 100 million units, ranking among the top three in the world in terms of sales, second only to Nokia and Samsung, and surpassing the 0.9 billion units of Motorola and Sony Ericsson in the same period. In 2010, LG mobile phones rushed into the top three in the Chinese market. At this time, LG mobile phones have an 11% share of the world.
LG's glory didn't last long. According to Gartner's statistics on the market share of mobile phone brands in 2011 and 2012, LG's market share has slipped to 4.9% and 3.3%.
Although in the first quarter of 2014, LG's sales still ranked third in the world, but its annual sales were only 78 million units, of which 59 million were smartphones, and the global market share ranked outside the five, surpassed by domestic brands Huawei, Lenovo, and Xiaomi, and has been surpassed since then. In 2018, LG opted out of the Chinese market.
After 6 consecutive years of losses, LG also tried to regain its strength and launched concave curved screen mobile phones and dual-screen mobile phones, but it has never recovered the lost customers. In the end, it ended with 24.7 million smartphone shipments in 2020 and a market share of 2%.
LG delisting relies on finding a new way out of the supply chain
What was once the world's third mobile phone brand has now had to retire, which is a wake-up call for niche manufacturers who survive in the cracks among giant brands.
The development of smart phone business in the 5G era requires the support of a perfect intelligent terminal product chain, and in addition to winning market acceptance with product strength and innovative technology, it is also necessary to seek a new way of development. For example, Nokia's net mobile phone sales in 2020 fell by 6% year-on-year, but after focusing on 5G business, Nokia, which won 133 5G commercial contracts and deployed 39 5G live networks, still achieved positive operating profit growth.
ZTE brands, which were sanctioned by the United States earlier, are also actively making a living for themselves, and the first 5G video mobile phone is about to launch the first off-screen camera phone. In the future, it will also focus on video platforms, focus on creating a platform for integrated video capabilities, expand scenario-based services such as distance education, and compete for 5G market resources for long-term development. As for LG mobile phones, even if they do not do smart phones, they can still become the upstream suppliers of the industrial chain with the patent supply of display technology, which is far better than the living space of small manufacturers such as ZTE and Meizu.
In general, the competition pattern of smart phone market giants is becoming more and more fierce, and niche brands that are struggling to survive should seize the 5G technology outlet, aim at the intelligent terminal market brought by 5G to further expand and extend, form an ecological closed loop of intelligent interconnection, and create a smart family barrel to retain brand users.