What a blunder. LG had a contract to build first Android phone, but walked away from the deal
Wow! Is this LG’s biggest strategic blunder or what?
According to Wall Street Journal (subscription required), back when Google was still working on it’s mobile OS in secret, they had a deal with LG to build the first Android phone.
Then LG backed out of the deal, and Google had to turn to HTC for the Android launch hardware. The rest is history, as they say.
LG went on to tinker with its Chocolate franchise and build iPhone wannabe’s like LG Prada and Arena. Then they made an ill fated strategic bet on Windows Mobile in early 2009, just as Microsoft was end-of-lifing the OS and switching its development resources to Windows Phone 7. Leaving LG without the needed expertise and competitive hardware in 2010, just as smartphone growth exploded.
I wonder what prompted LG to drop Android back in 2007? My guess – it was their hubris.
Remember – 2007 was the year the first iPhone launched with great success. And LG was the only company in mobile who had a very similar device, that was almost ready to ship on the day Steve Jobs announced iPhone. That was LG Prada KE850.
LG’s contract with Google for the first Android phone must have been for a Blackberry look alike device, just like those first Android prototypes. Come to think of it, I actually never learned who made those first prototypes. Could it have been LG?
When Google decided to reset its Android development efforts, and make a full screen touch phone, LG balked. In their minds – they were far ahead of the industry to make a true iPhone competitor. In early 2007 LG managers were walking around and telling everyone who’d listen that Apple stole LG Prada design to make an iPhone. And they already had LG Viewty in advanced development. A phone far ahead of iPhone in every spec you can name, that must have been screaming “iPhone Killer” to LG execs. All they needed to do, was to tweak software part a bit. Why the heck would LG share their touchphone lead with Google?
Only tweaking that software to make a desirable touch phone turned out not to be as easy as it seemed. Even LG Arena, a touchphone launched two years later – in 2009, with a fancy S Class touch interface, was a usability nightmare compared to iPhone.
In the meantime, HTC went on to build the first Android smartphones, bet heavily on Google, and today is the 4th most important player in smartphone market. Shipping tens of millions of devices and raking in tons of cash.
While LG’s mobile division is bleeding money, and is still considered to be a bit player among smartphone vendors.