The Fall of a Giant: Why LG Had to Exit the Smartphone Business

 

The Fall of a Giant: Why LG Had to Exit the Smartphone Business

For decades, LG was the king of innovation and "cool." From the legendary Chocolate Phone to the high-end Prada Phone, LG defined what a mobile device could be. However, in April 2021, after 23 consecutive quarters of losses totaling nearly $4.5 billion, LG finally called it quits.

While LG still thrives in home appliances and vehicle components, its absence in the smartphone market is still felt. Let’s look at the four major reasons why LG’s mobile division couldn't survive.

1. The "Sandwiched" Identity: Stuck Between Giants and Newcomers

(샌드위치 신세: 거물과 신예 사이에서 길을 잃다)

LG’s primary struggle was a lack of a clear market identity. In the premium segment, it was perpetually overshadowed by the "duopoly" of Apple and Samsung. Consumers who wanted prestige chose the iPhone; those who wanted the best Android experience chose the Galaxy.

On the other end of the spectrum, aggressive Chinese manufacturers like Xiaomi, Oppo, and Vivo began flooding the market with high-spec devices at incredibly low prices. LG found itself "sandwiched" in the middle—neither prestigious enough to command a premium price nor cheap enough to compete with the budget kings. Without a loyal "fanbase" like Apple or the massive marketing scale of Samsung, LG’s market share slowly eroded.

2. Innovation Without Practicality: The Curse of the "Experimental"

(실용성 없는 혁신: '실험 정신'의 저주)

LG was arguably the most courageous company in the industry, but that courage often led to impracticality. They frequently introduced "world-first" features that consumers didn't actually ask for.

Think of the LG G5 with its modular design; it was a brilliant idea on paper, but in reality, it was clunky and the modules were expensive. More recently, the LG Wing featured a swiveling dual-screen that looked like a T-shape. While these designs were "cool," they didn't solve real-world problems. By focusing on "gimmicks" rather than perfecting the core user experience (like camera software or battery life), LG alienated mainstream users who just wanted a reliable phone.

3. The Software and Reliability Achilles' Heel

(아킬레스건: 소프트웨어 지원과 품질 논란)

Hardware can sell a phone once, but software keeps a customer for life. LG’s biggest failure was in software updates and long-term support. Compared to Samsung or Google, LG was notoriously slow to provide Android version updates.

Furthermore, LG suffered from several high-profile hardware reliability issues, most notably the "bootloop" problem on models like the G4 and V10. These issues severely damaged the brand's reputation for quality. Once a consumer loses trust in a brand’s reliability, it is incredibly difficult to win them back, especially in a market where a phone is an essential tool for daily life.

4. A Strategic Retreat: Choosing Future Growth Over Past Losses

(전략적 후퇴: 과거의 손실보다 미래의 성장을 선택하다)

Ultimately, the decision to close the mobile division was a cold, calculated business move. LG leadership realized that pouring more billions into a saturated smartphone market was a "sunk cost."

By exiting the mobile business, LG was able to reallocate its massive R&D resources toward high-growth sectors: Electric Vehicle (EV) components, robotics, and smart home ecosystems. Today, LG is a major partner for global carmakers, providing batteries and infotainment systems. In 2026, we see that LG didn't really "fail"; they simply realized that their future was not in our pockets, but in our cars and our living rooms.

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