LG's poor performance in China may make it the next brand to fall

The industry that is most deeply touched by the poem "The waves wash away all the heroes of the ages" is the mobile phone industry. Whether it is an industrial aircraft carrier with a century of accumulation or a powerful new capital elite, they are at a loss between the rise and fall of the mobile phone industry and can only leave it to fate.

Motorola, the inventor of the great mobile phone, collapsed just like that; Nokia, which once occupied half of the global market, collapsed just like that; Sony Ericsson, the king of photography and entertainment, collapsed just like that; HTC, the former king of Android, collapsed just like that; BlackBerry, a secure mobile phone that focused on email push, collapsed just like that. The once-popular "China Cool Alliance" now only has Huawei to boost the Chinese people's ambitions.

The Chinese market is the world's largest smartphone market, and the competition is the most intense. Therefore, the Chinese market has become a barometer for the collapse of major mobile phone brands, and even a place for them to thrive.

Recently, the news focus of China's industry has been mostly on LeEco, Coolpad and Jia Yueting. In fact, LeEco and Coolpad are now one company. In June 2016, LeEco once again invested in Coolpad shares, with a shareholding ratio of 28.9%, becoming the sole controlling shareholder. Jia Yueting's entry and Guo Deying's exit became the turning point of Coolpad's rise and fall. I can bluntly say that Coolpad was dragged to death by LeEco.

These excitements have obscured the decline of another enterprise, making people ignore the collapse of another mobile phone brand - the Korean LG mobile phone. Of course, another important reason why LG is ignored is that in the Chinese market, LG is not as popular as Motorola and Nokia. LG mobile phones may never have been a sensation, and even if they have, they are short-lived and a distant memory.

Whether in the global market or in the Chinese market, it is clear that LG mobile phones have "collapsed". In the global market, when LG mobile phones were in their heyday, they were only second to Samsung and Apple, and ranked among the top three in the world, and they persisted for quite a long time; in the Chinese market, LG once mixed in the ranks of big brands with its chocolate series, especially in the era of feature phones, LG mobile phones really became synonymous with youth and fashion, and had a good reputation among the female group.

Today, LG mobile phones have lost their glory. In the global market, LG mobile phones have been squeezed out of the top five; the top five are Samsung, Apple, Huawei, OPPO, and VIVO. With the strong rebound of Xiaomi mobile phones this year, LG mobile phones have no place to stay. Based on the sales of major brands this year, it can now be basically judged that by the end of the year, LG's share of the global market will fall to the seventh or eighth place - this is the life and death line for a global mobile phone brand.

LG's latest mobile phone financial report strongly supports this judgment. At present, the mobile phone business has become a burden and drag on LG's overall operations. According to the LG Group's financial report, in the second quarter of this year, LG's overall revenue was US$12.89 billion and its profit was US$590 million. Among them, the mobile phone business had a revenue of US$2.39 billion and a loss of US$117 million. This is the ninth consecutive quarter that LG's mobile phone business has suffered losses.

Although LG is wealthy, it is estimated that no corporate leader would be willing to let such a business unit continue to lose money indefinitely. However, LG does not seem to have found a good way to turn losses into profits.

It is a real question whether to stay in China or to quit

In the Chinese market, LG mobile phones are performing even more dismal and are not seeing any light.

According to third-party data, LG shipped about 467,000 mobile phones in the Chinese market in 2016. IDC data shows that the total number of mobile phone shipments in the Chinese market in 2016 was 467 million. Based on this data, LG's mobile phone market share in China is about 0.1%.

How embarrassing is this data? In China, any third-rate mobile phone company has a shipment volume far higher than this figure, and its market share is higher than this proportion. In other words, judging by sales volume, LG's image as a big brand in China has been completely destroyed, and it has fallen into the dilemma of having to rely on small knockoff brands for survival.

In addition to the brand sitting on a downward roller coaster, the value of LG mobile phones is also falling. LG mobile phones used to be a member of the high-quality and high-priced club of international big brands, but now LG mobile phones cannot be sold at high prices at all and are wandering in the low-end price range. Even the flagship models of LG mobile phones are far from the flagship models of other brands. On the other hand, Chinese brands represented by Huawei, OPPO, and VIVO have successfully opened up a dual-upgrade channel for brand and value, and are doing very well.

What troubles LG's mobile phone development is that it is at a loss in the face of the rapidly changing market and is several steps behind other competitors. A typical example is this year's LG flagship model G6. Other brands are using Qualcomm Snapdragon chip 835, but G6 still stays on the Snapdragon chip 821, which is the standard for flagship phones in 2016. The chip is the engine of the smartphone. If the chip cannot keep up with the flagship standard, can it still be considered a flagship?

Although the recently released LG flagship phone V30 uses Qualcomm Snapdragon 835 chip, it is still "a light boat has passed through thousands of mountains". Compared with other brands, the flagship phone using 835 has been released a long time ago, but LG's reaction is very much like the late master in "The Six-Fingered Magic Harp", who is late. The mobile phone industry has always advocated that the fast fish eats the slow fish, and the situation will change dramatically in three to five months. Now Apple's iPhone is obviously lagging behind in the speed of launching new products, let alone LG? If it cannot introduce new products in time, it will not attract attention, and sales and value will not increase. Being eliminated becomes an inevitable option.

Of course, there is another fundamental problem, which is that LG phones cannot even pass the minimum quality control. According to foreign media reports, LG G4/V10 was sued in the United States for the restart issue. The quality problems of LG G series phones sold in China are also endless, including the G2 touch failure issue, the G3 dock issue, the G4 motherboard issue and the G5 poor quality control.

No wonder we often hear rumors that LG is going to withdraw from the Chinese mobile phone market. Of course, whether a product withdraws from a market is a subjective decision made by the company, but objectively it is the market that has the final say. If a product falls to the point where no one cares about it, it would be meaningless to hold on - if it is rich and can afford the loss, it is not a bad idea to refuse to leave.

Under the premise that the South Korean government did not listen to China's good advice and insisted on deploying the THAAD anti-missile system, angering Chinese consumers, LG's mobile phone development in China can only be worse and difficult to redeem. No wonder LG itself is slowly losing confidence. When its flagship G6 was launched in China, LG was uncharacteristically lazy to hold a press conference.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.