A Change of Pace

LG Ditches the Yearly Phone Release Schedule

LG_lFor Samsung and Apple, the timetable for releasing new flagship smartphones has settled into a dependable rhythm. Apple unveils its flagship phones in September and Samsung about five months later. There’s an engineered buffer between these two top industry announcements, making it challenging for other phone-makers to find a slot that won’t be quickly drowned out.

LG announced its last two G-series smartphones in February 2017 to attract attention after the new iPhone smell had faded. But things could be different in 2018, as the CEO of LG Electronics, Jo Seong-jin, said that the company would no longer release smartphones according to the typical yearly cadence. Instead, its launch strategy would depend on market conditions including trends in features and technology as well as market pull.

The LG G7 handset would be the logical successor to the G6 and we would’ve expected it to be announced next month at Mobile World Congress — rival Samsung has said it will unveil its Galaxy S9 at the event. Now it seems possible that LG will not unveil the device in the coming months. The yearly rhythm is breaking down.

LG’s mobile unit hasn’t made money in almost three years and is being subsidised by the company’s other divisions. LG’s leadership has decided that it will no longer simply go through the motion of developing and releasing a flagship smartphone based on the current annual cycle.

LG is effectively sending a message that the upgrade from its G6 phone to the G7 will be marginal, with a risk that demand will be soft. There’s a need for more revolutionary features to convince dedicated LG customers and others to upgrade. The phone-maker still sells a lot of handsets, but the volumes are coming in at the lower end of the market. LG’s high-margin G and V series are stuck in a tough spot.

Mr Jo’s statement about moving away from the annual smartphone release schedule highlights LG’s status. While Apple and Samsung each have eager users and investors, LG needs to refresh its mobile strategy rather than its mobile portfolio.