2.5.2020 2:00 AM

Tech

Report: LG’s best 5G phones will be reserved for the U.S. and Europe

It’s part of a cost-cutting strategy at the flagging smartphone division.

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LG is a marginal player in smartphones today, with recent reports lobbing its share of the market into the fateful “other'' category. Like HTC before it, the Korean company was squeezed by intense competition at both the low and high-end, and its phones just aren’t memorable. Now LG is reportedly planning to scale back costs at its mobile division by limiting sales of its pricer 5G phones to the U.S. and Europe.

Capitalizing on carrier discounts — Besides being markets where consumers are less price-sensitive, LG is also apparently banking on continued competition among wireless carriers in the U.S. and Europe to help sell its premium phones. Carriers in the U.S. frequently offer promotions on new smartphones in order to secure new customers and upgrades, making them seem cheaper than they really are. In LG’s home market of South Korea this competition is less common, according to the Korean news site that first reported the story. With U.S. carriers already going crazy promoting 5G it's not absurd of LG to try and race out quickly with phones to capture that attention.

Under the new plan, LG will still offer 5G-capable phones in the rest of the world, but they will be mid-range devices rather than flagships. It's also been pushing cheap smartphones in the growing Indian market.

Mobile is just dragging LG down — Pushing the cost of marketing its premium phones onto the carriers may be able to somewhat help LG’s weakest division, but things are still bleak. Last year the company saw strong sales in home appliances while its mobile division posted double digit declines in shipments and revenue, pulling the whole company down with it. LG’s smartphone sales were down 21 percent over the previous year, and the division has lost money every year since 2017.

LG’s former mobile chief said last year that the company would push to make “unique phones that provide differentiated value,” but most of what we’ve seen since then, like the G8 ThinQ and rumored G9 ThinQ, have been boring slabs with gimmicky software additions like hand gesture controls. Samsung has innovated with things like curved screens and larger displays while Apple has made quality hardware. Huawei and Xiaomi have price. What is LG known for? Nothing, really.

What I'm really saying is that maybe LG should just give up on smartphones?