LG’s exit from the smartphone business felt inevitable in the weeks before as rumors circulated. When it was finally confirmed, Avi Greengart, a longtime consumer tech analyst and president of Techsponential, noticed a trend towards nostalgia in the response to the news.
“I don’t get many people saying, ‘What should I do to replace my LG G8X ThinQ?’ I get ‘Aw, my first phone was an LG flip phone, and it was durable and reliable and I loved it.’ ”
As someone who has spent many years covering the digital camera market, it is a very familiar moment for me. We mourn the loss of the brand that gave us our first flip phone or our first camera with a tweet and heartbreak emoji. But truthfully, we moved on a long time ago, like most other people who buy phones or cameras.
Things didn’t look good for LG’s phone business in 2016 when it introduced the modular G5, and the failure of the start of the ecosystem persisted in what would become years of losses for the mobile division. In 2020, the smartphone business posted an operating loss of approximately $ 750 million for the year; the company promised to “take a closer look at the company’s direction,” and we now know how that turned out.
While most shoppers have moved on, there are still gaps in the market when a Kodak or an LG packs it. “This is a void. When they leave, this will be a void, ”said Ryan Reith, program director of IDC’s Mobile Device Tracker division. He says LG still had a market share of nearly 10 percent in the US last year.
In particular, the company still had a solid position in the prepaid device industry. Greengart doesn’t think there will be a lack of appetite to capture that market share. “The competition there is brutal. The real question is whether US carriers are inviting a new brand – someone like Xiaomi would be my longshot. “The company’s Redmi and Poco lineups may be good candidates, with a focus on bringing premium features and solid performance to affordable handsets.
Greengart also notes that OnePlus already has a foot in the door with Metro by T-Mobile, the carrier’s prepaid sub-brand. Samsung has already announced that it will be selling two of its cheapest A-series phones, the A02s and A12, this spring through prepaid brands like Cricket and Metro.
As for the under $ 300 space overall, there’s no shortage of brands ready to jump. “I would say the two brands likely to take that share will be Motorola and TCL,” says Reith. He notes that Motorola is already well positioned to pick up LG’s Latin American customers, who recently accounted for about 30 percent of its cell phone business. Even at the individual device level, there are clear heirs: one of LG’s last best-selling devices is the Stylo 6, and its only competitor, the Moto G Stylus, is frankly a better phone.
TCL has also made it clear in recent years that, in addition to the phones that the company already makes for other brands, it is eager to get the handsets of its own brand into more hands of the consumer. Reith says he is “optimistic” about the company’s outlook as more US shoppers have become familiar with the brand through their TV business. If one thing is for sure, it’s that more than a few companies are in a good position to fill that void LG is leaving behind. As Greengart puts it, “There will no doubt be many substitutes; in fact there are already. “
While LG only had a small presence in the premium market, there’s a gap there too – even if it’s mostly symbolic. The few devices that the company still sold were an alternative to the two dominant brands in the US: Apple and Samsung. Especially given the lower cost of entry for the S21 series this year, those remaining customers will likely be easily picked up by the duopoly. “The market is mainly Apple and Samsung in the United States,” said Greengart. “If it was concentrated before, it is even more concentrated today.”
Realistically, the market had already spoken. LG’s efforts for bold, offbeat designs in the premium space never caught on and have led the company into serious trouble. Reith points to the LG Wing as an example. “To come up with such a design … it costs so much money for R&D that if you put that out, it only sells thousands of units – not hundreds of thousands, but thousands of units – it’s a big, big loss, ”he says.
LG’s premium devices may have been interesting and unique, but the market was talking and the company’s mobile phone abandonment became seemingly inevitable. That’s how these things work, and a host of companies are ready to dive in and pick up where LG left off. But whether you’re following mobile tech closely or just have a special place in your heart for your old flip phone, many of us will still take the opportunity to pause and shed a digital emoji tear.