South Korean electronics giant, LG, is officially leaving the smartphone market. The company confirmed the same in a statement today, saying that the move was a “strategic decision”. “LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and services,” the company said. But what exactly does this mean? Why is LG choosing to exit the smartphone business, and why that might be a good move? Let’s explore some reasons.
The extremely competitive market
LG is right, the smartphone market is indeed competitive, especially since Chinese companies took over the space. But when companies say competitive, they don’t really mean there are too many players. The competition is with respect to pricing, which is where Chinese manufacturers get the advantage.
Companies like LG have usually sold products at higher prices than competitors like Xiaomi, Vivo or Oppo. As a result, they have lost market share, especially in markets like India where cheaper phones sell better.
You might argue that LG still makes good flagship devices, which means they should be able to make money from that. The problem is that flagship phones sell in lower volumes in markets like India, so they don’t make big money here. For markets like US and UK, where flagship phones do sell in higher numbers, the majority of the market share is taken by Apple and Samsung.
Focus on the future of mobile
But the competition in the market may only be one of the reasons why LG is quitting the business. “Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products,” the statement said. This is where things become more interesting.
You see, companies like LG don’t make money from numbers alone. They actually take technology forward by investing a lot in research and development. This is one of the reasons why they can’t make cheap products as fast as Chinese smartphone makers can. Their focus, as an overall business, is in the future of technology.
So, by quitting the smartphone business, LG is actually freeing itself up for the future of mobile. And coincidentally, the future of mobile isn’t in the handsets that we use today. Mobile technology is only a step in enabling the future of computing, which most believe is going to be in ambient devices — devices that are all around us and don’t require touch-based interactions.
LG may not have shipped many smartphones in the last few years, but you can be assured that it has the expertise to develop future technologies.
Rollable OLEDs Will Be Key
Rollable OLED panels are perhaps LG’s biggest contribution to the future of technology. After all, who doesn’t want a television that can appear as if out of nowhere, right?
But rollable OLEDs aren’t just the future of TVs. Large rectangular screens have constrained the designs smartphone makers can use for a long time now. As a result, a display that can be rolled into something else and is flexible enough for different shapes is going to enable devices that we may not even have thought of yet.
We have already seen what Samsung and others have achieved with flexible screens and foldable phones, could a rollable OLED offer more? Remember those photos of touchscreen panels wrapped around a user’s hands? That could be the future too.