Why is LG such a failure in the mobile phone business and can they turn things around?

LG is a company that I love to beat up, not because they don’t have any talented engineers, but because they consistently fail to make full use of resources that they have. The company’s business strategy, as far as I and the rest of the world can tell, is to clone everything Samsung makes as quickly as humanly possible and hope for the best. The most recent example of this type of behavior is the LG Vu, a 5 inch 4:3 smartphone/tablet hybrid with a stylus that was clearly inspired by the Galaxy Note.

Forgetting about specific phone models for a second, let’s talk about some hard data. At the end of the first quarter of 2012, LG lost their position as the fourth largest handset maker to the Chinese company ZTE. During the first three months of the year, LG managed to ship 13.7 million devices. That’s 44.1% less than the same quarter a year ago. Meanwhile, ZTE shipped 19.1 million devices, up 27% year on year.

Looking at more recent numbers, LG’s shipments slipped even further to 13.1 million units during the second quarter. Now that’s not the bad news. The bad news is that 44% of those devices were actually smartphones. Do the math and that comes out to a little over 5.75 million devices. To put that figure into some context, Nokia shipped 6.2 million Symbian handsets during the same quarter. Yes, you read that right, Nokia’s Symbian portfolio outsold LG’s Android lineup. Research in Motion, makers of the BlackBerry, also miraculously managed to sell 11.1 million devices during the same time. That’s nearly double!

So why is it that this company can’t succeed in the mobile phone game? Like Samsung, LG makes televisions. Like Samsung, LG makes refrigerators. Like Samsung, LG makes screens for smartphones and tablets. Back in April 2011, LG even announced that they licensed ARM’s Cortex A15, so pretty soon the company is going to start making their own processors. All the parts are there, so what’s missing?

Let’s start with the obvious, LG’s software. If Samsung’s TouchWiz is a direct ripoff of Apple’s iOS, and LG’s skin is a clone of TouchWiz, that means LG’s phones effectively have a user interface that’s as bad as those cheap Chinese iPhone clones you see running a custom Android ROM. Rumor has it that LG’s upcoming flagship device, the Optimus G, will come in a Nexus flavor. There’s nothing more I’d like to see happen than for sales of the Nexus G to surpass sales of the Optimus G, thus making LG finally realize just how much people hate their work.

Speaking about the Optimus G, that’s the company’s flagship device, right? Well what about the Optimus 4X HD? LG called that thing the “world’s first quad core phone” when they showed it off in February. That claim is a bit laughable since it started shipping in June. That’s one month after Samsung’s Galaxy S III, and two months after HTC’s One X. So just to recap, how long was the 4X the flagship phone? Less than 100 days?

This isn’t the first time LG has pulled this kind of nonsense either. Back in December 2010, LG announced the Optimus 2X, the “world’s first dual core phone“. It shipped five mounts later in April 2011. By that time Motorola was already selling the Atrix in America, Samsung’s Galaxy S II was weeks away from hitting store shelves in Asia, and HTC’s Sensation was making its way to Europe.

Bad software and bad timing are normally enough to kill your chances of success, but what puts the last nail in the coffin is bad design. HTC isn’t in the best shape right now, financially that is, but just look at the recently announced 8X and 8S and try not to drool on yourself. Samsung, love them or hate them, also makes their Galaxy devices look unique. Nothing needs to be said about Apple, obviously. Now look at the Optimus G and try to feel something other than boredom.

Can this ship be turned around? Yes, but it’s going to require some humility. LG needs to admit to themselves that they’re horrible at software. They need to admit to themselves that their marketing department is staffed by a bunch of amateurs. And finally, they need to hire some industrial designers with years of experience and give them the final say on what gets shipped and what gets thrown in the garbage.

Like I said earlier, LG has everything they need to be great. Watching them mess up, over and over again, is not only heart breaking, it’s absolutely maddening.

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  • mark rodriguez

    I think on the design front lg is not quite as bad as you make it out to be- the optimus 4x has a certain style of its own and the optimus g, whilst sporting an anodyne slab of glass on the front has an understated sleekness that is quite appealing.
    But I agree on the software front lg has been pretty lousy- their OS updates leave alot to be desired. However lg knows it has to raise its game in order to survive in a cut throat environment and it wouldnt surprise me if over the coming year it regains some of its competitiveness.

  • vasras

    “mounts” = “months”

    No, it’s not just about timing.

    LG has the same issue as Nokia. Their complete product cycles are too long. They can’t compete then. If you have too long lag times, it doesn’t matter when/what you announce, because you will be later than the competition.

    Further, LG’s software production process is in shambles: they ship crap (face it) and they ship late.

    If they want to compete with the likes of Apple and MS, whose core business is/was software, or even with Samsung, they need to improve by miles.

    The hardware designs, form factors, etc are a minor issue after these.

    But if product cycle and software quality are not up to par with competition, they will always be lagging behind, sans some single lucky-hit products.