The Demise Of LG - How An Electronics Juggernaut Was Overthrown

Summary

LG, once a prominent player in the global smartphone market, exited the industry in 2021 after years of financial losses, despite being an innovator with features like capacitive touchscreens, modular phones, and dual screens. Their downfall is attributed to poor marketing, gimmicky features, and a lack of focus on customer experience, resulting in numerous hardware and software issues. Although they pioneered several smartphone trends, LG's missteps and inability to compete with giants like Apple and Samsung led to their smartphone business shutdown, leaving the company to focus on more successful ventures.

Takeaways

• 📱 LG shut down its smartphone business in April 2021 after years of financial losses.
• 💰 LG lost $4.5 billion in the smartphone market over 6 years, despite being a prominent electronics brand.
• 🏆 LG was once the third-largest smartphone maker globally and held strong in North America until their shutdown.
• 🚀 LG consistently innovated, introducing capacitive touchscreens, modular phones, flexible displays, and swivel phones.
• 📢 A key issue for LG was poor marketing, especially compared to competitors like Apple and Samsung.
• 📉 LG's failure in the premium market was due to focusing too much on hardware gimmicks rather than market positioning and customer needs.
• 💡 Many of LG's innovations, like ultra-wide cameras and dual-screen phones, were ahead of their time but didn’t catch on.
• 🔧 LG faced significant software and hardware issues, including overheating, bootloops, and fragile components.
• 😬 In their final years, LG became desperate to drive sales, often sacrificing customer experience in pursuit of attention-grabbing features.
• 👋 Despite their smartphone business failure, LG continues to thrive in other industries like home appliances, where they have strong brand recognition.

Q & A

Why did LG decide to exit the smartphone business?

LG exited the smartphone business due to significant financial losses, totaling $4.5 billion over six years. They struggled to compete with Apple and Samsung, and despite attempts to innovate, they couldn't sell enough units to justify the costs.

What was one of LG's biggest mistakes in the smartphone market?

One of LG's biggest mistakes was its lack of effective marketing. They approached the smartphone market with the same mentality as their appliance business, not realizing that smartphones require strong marketing and a sense of exclusivity, unlike appliances.

What was the significance of the LG Prada, and why didn’t it succeed?

The LG Prada, released in 2006, was significant because it was the first phone with a capacitive touchscreen. However, it didn’t succeed largely due to LG’s poor marketing, as most people never even heard of it despite its technological innovations.

How did LG's marketing approach differ from companies like Apple?

LG didn’t create hype or tension around its smartphone releases. Their launches were low-key, often timed for South Korean audiences, with no synchronized global rollout. In contrast, Apple created massive excitement with their keynotes and synchronized global product launches.

What are some of the innovations LG introduced in smartphones?

LG introduced several innovations, including the first capacitive touchscreen phone (2006), flexible OLED displays (2014), modular smartphones (2016), ultrawide cameras (2016), dual screen phones (2019), and swivel phones (2020).

Why did LG’s experiments with innovation often fail?

Many of LG’s innovations were seen as gimmicks that didn’t resonate with users. For example, their modular phone (LG G5) lacked support from partners, and their curved smartphones (LG G Flex) were a trend that quickly faded, making their innovations impractical.

How did LG’s shift to the premium market backfire?

LG's shift to the premium market backfired because they focused too much on adding unique but impractical features instead of positioning their products effectively. This, combined with a lack of strong marketing, made their products expensive but less appealing compared to competitors.

What technical issues contributed to LG’s downfall in smartphones?

LG smartphones suffered from multiple technical issues, including bootloops, battery overheating, fragile camera glass, and inefficient software, leading to poor real-world performance. These issues alienated existing customers, contributing to their downfall.

Why did LG’s smartphones fail to attract attention despite innovation?

Although LG frequently innovated, their smartphones failed to attract attention due to poor marketing, delayed international launches, and innovations that often felt like gimmicks rather than practical improvements that appealed to consumers.

What lessons can be learned from LG’s smartphone failure?

LG’s smartphone failure highlights that success in one industry doesn’t guarantee success in another. Their downfall can be attributed to poor marketing, focusing on impractical innovations, and neglecting customer experience, showing that a strong product must be paired with effective positioning and customer focus.