Stranger Things
As we have noted, LG Electronics (066570.KS) has finally decided to exit its money-losing smartphone business after 6 years of losses totaling $5.4b. One of the last smartphones the company released (October 2020) was the unusual LG Wing 5G, a 6.8” smartphone with a rotating 3.9” second screen, with only 3 low-priced LG smartphones released this year. The original price of the Wing when it was released was $999, although AT&T (T) was selling it for $1,049. LGE has promised to continue to update the OS on its existing phones for three years, and FlipKart (WMT) will throw in a one-year warranty and 5 years of service if you buy one, but the real action is with the phone’s price.
The difference in full (no trade-in or new line discounts) price for the same phone (256 GB) among the three carriers is unusual, with T-Mobile (TMUS) the lowest at $599, Verizon (VZ) at a more normal $999, and AT&T (T) still selling it at $1,049, and at various other on-line retailers, the price can go as low as $489, but if you are interested in buying what might become a museum piece years from now at the best possible price, you will have to travel to India, where you can buy that same phone for $399.99, 60% off of the listed price.
History will tell us whether the LG Wing 5G will have any value years from today, but if we look back at a particular Samsung (005930.KS) smartphone failure, the Galaxy Note 7, released in August of 2016, stranger things have happened. The Galaxy Note 7 was infamously known for busting into flames, causing Samsung to informally recall the units in the US and replace them with ones with a different battery. Unfortunately those also caught fire and a worldwide recall of the Galaxy Note 7 was reported on October 10, 2016, causing an estimated $17b in costs to Samsung. What makes that very negative incident unusual is that in July 2017, 9 months after the recall, Samsung released a limited release refurbished version of the Galaxy Note 7 called the Galaxy Note FE (Fan Edition) for $610, a 29.5% discount from the original price. While relatively limited in its release, the Galaxy Note FE was a hit and became a collector’s item.
The difference in full (no trade-in or new line discounts) price for the same phone (256 GB) among the three carriers is unusual, with T-Mobile (TMUS) the lowest at $599, Verizon (VZ) at a more normal $999, and AT&T (T) still selling it at $1,049, and at various other on-line retailers, the price can go as low as $489, but if you are interested in buying what might become a museum piece years from now at the best possible price, you will have to travel to India, where you can buy that same phone for $399.99, 60% off of the listed price.
History will tell us whether the LG Wing 5G will have any value years from today, but if we look back at a particular Samsung (005930.KS) smartphone failure, the Galaxy Note 7, released in August of 2016, stranger things have happened. The Galaxy Note 7 was infamously known for busting into flames, causing Samsung to informally recall the units in the US and replace them with ones with a different battery. Unfortunately those also caught fire and a worldwide recall of the Galaxy Note 7 was reported on October 10, 2016, causing an estimated $17b in costs to Samsung. What makes that very negative incident unusual is that in July 2017, 9 months after the recall, Samsung released a limited release refurbished version of the Galaxy Note 7 called the Galaxy Note FE (Fan Edition) for $610, a 29.5% discount from the original price. While relatively limited in its release, the Galaxy Note FE was a hit and became a collector’s item.
LG Wing 5G - Source: LG
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