Recently, a hot topic in the mobile phone circle is the news that LG Electronics announced its withdrawal from the mobile phone market. It stated that it will completely stop the production and sales of the mobile business unit and complete the liquidation of the mobile phone business unit by the end of July.
As one of the giants of global mobile phone manufacturers, LG once ranked third in the world in its mobile phone shipments at its peak.
So, what caused LG to give up its mobile phone business? Today we will analyze it.
Accumulated losses for 23 consecutive quarters amounted to more than 29 billion yuan
LG in 1993,
In fact, LG is also an old player in the mobile phone circle and has had many glorious moments. As early as 1992, LG Electronics entered the mobile phone field. At that time, it was the era when the three giants Nokia, Motorola and Ericsson were in charge.
with its keen market sense and innovation, LG Electronics launched the chocolate phone KG90 with great success.
The slim and stylish appearance, the leading capacitive touch navigation keys, the red backlight that “blushes when you touch your face”, and the celebrity endorsements of Hyun Bin and Kim Tae Hee all made it a popular product at the time.
The machine is priced at more than 4,000 yuan, but sales in the Chinese market have exceeded 600,000 units in one year.
In April 2007,
LG Electronics announced that the cumulative global sales of “chocolate” mobile phones reached 10 million units, making it the first LG mobile phone model to exceed 10 million units in sales.
Since then, LG has successively launched many “dessert phones” on the market, including ice cream, lollipops, etc., which have received good market feedback.
In February 2009,
LG Electronics announced through its financial report that the actual sales of LG Electronics’ global mobile phones in 2008 exceeded the 100 million mark. In 2013, LG mobile phone sales reached a historical peak, and its market share was second only to Samsung and Apple, ranking third in the world.
Since then, with the increasingly fierce competition in the global mobile phone market and the rise of domestic mobile phone brands, LG mobile phones have gradually been marginalized.
According to data, from the second quarter of 2015 to the fourth quarter of 2020, LG mobile phones have suffered 23 consecutive quarters of losses, with a cumulative loss of more than 29 billion yuan.
At present, LG chooses to abandon the mobile phone business, or it is also helpless.
Product design gradually deviates from user experience
There are many reasons for the failure of LG’s mobile phone business. First of all, poor product experience is the main reason.
It is obviously wrong to say that LG lacks innovation. In fact, in order to save the mobile phone business, LG mobile phones have done everything they can to create a variety of avant-garde products, but advanced design does not mean that user experience is good.
the LG G Flex series was equipped with a flexible display, and the machine also won the iF Design Gold Award; in 2020, when most manufacturers are exploring folding screens, LG released the LG Wing, which is composed of two screens stacked and has a very unique shape. ；
Other modular mobile phones that can be installed with components are also LG’s first. LG has never stopped exploring the design of mobile phones, but the practicability of these products is average, and ordinary users are not interested in it, let alone the user experience.
Product quality control also greatly affects the user experience.
According to statistics, LG’s G3, G4, G5 and other products have a series of quality problems, involving performance, battery life, and immature modular design. Basically every generation has been complained by a large number of users, and LG’s accumulated reputation is slowly being wiped out. Exhausted.
Poor pricing creates a vicious circle
In addition to the poor user experience, LG’s product pricing strategy for mobile phones is also a problem.
LG Wing is a good example. This product is priced at the same price as the flagship phone, but the processor is equipped with Snapdragon 765G. The performance does not match the positioning of the flagship phone. The rotating dual-screen model is novel, but the actual experience is quite tasteless, with the same configuration. Compared with other brand models, the price is much higher, and users will naturally not buy it.
On the other hand, although LG’s flagship mobile phones have a high price, the price will “deep” after a period of time on the market, and they have almost become one of the most cost-effective mobile phones at the same price.
In the long run, users have basically figured out the pricing routines of LG mobile phones, so that their fans are unwilling to make first snap purchases.
LG’s inadequate understanding of user needs, insufficient market research, and poor pricing strategies for the entire product line form a vicious circle, which ultimately leads to problems in the entire LG mobile phone pricing system.
It was a very wrong decision to withdraw from the Chinese market
As the most competitive market in the global mobile phone market, the Chinese market is a great test for all mobile phone brands, even as strong as Apple and Samsung.
However, China’s mobile phone market is very large. Even if the overall sales volume is not high, it is still a considerable user base for mobile phone manufacturers. Therefore, each manufacturer pays attention to domestic marketing.
In the era of “chocolate” phones, LG used top celebrity endorsements and large-scale promotion and achieved good results.
But in the era of smart phones, you can hardly see LG mobile phone advertisements in China, and then even directly abandon offline stores and only operate online channels.
On the other hand, domestic mobile phone manufacturers are a combination of online and offline. LG has basically been overwhelmed in terms of brand voice, and in 2018 it even withdrew from the Chinese mobile phone market.
The lack of emphasis on brand marketing caused LG to miss the entire Chinese market, which also paved the way for its subsequent failure.
Write at the end
LG mobile phones are known for their non-traditional and innovative features. Although these features help differentiate LG from other mainstream brands, most consumers have not found much practical value from these features, product design concepts and user needs proudce conflict.
In addition, market competition has always been the survival of the fittest, but manufacturers can also learn to complement each other in fierce competition, better understand user needs, and create more competitive products.
LG withdrew from the Chinese market, avoiding competitive pressure in the short term, but in the end it accelerated the pace of marginalization of the brand.
Non-mainstream design deviates from the user experience, lack of emphasis on brand marketing, and poor pricing strategies, which are important reasons for the collapse of LG’s mobile phone business.
Nowadays, the competition in the mobile phone market is not just a competition of mobile phone products itself, mobile phone design, product marketing, user contact, etc. are all indispensable.
There are many examples of the fall of giants. LG is not the first brand to withdraw from the mobile phone market, and it will never be the last.