LG Foldable – Yes or No?
LG Electronics (066570.KS) is trying to decide what to do with its money losing mobile phone division, and as part of that decision, the fate of LG’s rollable smartphone device also hangs in the balance. Korean trade press has been suggesting that the project has been put on hold after LG ‘reportedly’ told suppliers, particularly BOE, who was developing the display, that the project has been put on hold, and that they could request compensation from LG in the future to cover their development costs. Earlier this week an LG official indicated that nothing could be confirmed at this pint regarding the company’s plans for a rollable smartphone, yet another LG official stated that “I can firmly deny that any such decision on future mobile products has been finalized.” This follows a similar denial that the company was planning to exit the smartphone business last month, only to later note that the company was open to all possibilities for the mobile division, even if the final decision has not been made.
LG is under considerable pressure to make a substantial change to the mobile division, which has lost~$4.5b over the last 5 years, and while LG has come up with some unusual mobile devices over the years, consumers do not seem to have attached themselves to any of them in a big way. LG has had its share of actual problems with some of its phones and in our experience, the software has never been quite up to par, but we expect after so many disappointing releases, LG’s mobile marketing must be in disarray. While LG could continue to move toward OEM phone development, the LG brand, which is highly regarded in other CE products, is not so in the mobile space, and unless LG management has a particular fondness for losing money, we would expect they would sell or JV out the mobile business this year, hopefully by the end of 1H. Given the circumstances, we expect the few remaining high-quality engineers and developers will get picked off by other smartphone brands this year, if the roster has not already been completely picked over, and little will be left by the time the company makes a final decision if they continue to deliberate.
Here’s the short promo for the LG rollable from CES this year: (ctl+click)
cdn.vox-cdn.com/thumbor/liWFEO6RJdq4XwjK3Ds3rx67Jzk=/0x0:926x518/920x613/filters:focal(389x185:537x333):gifv():no_upscale()/cdn.vox-cdn.com/uploads/chorus_image/image/68859281/lg_rollable_ces.0.gif
LG is under considerable pressure to make a substantial change to the mobile division, which has lost~$4.5b over the last 5 years, and while LG has come up with some unusual mobile devices over the years, consumers do not seem to have attached themselves to any of them in a big way. LG has had its share of actual problems with some of its phones and in our experience, the software has never been quite up to par, but we expect after so many disappointing releases, LG’s mobile marketing must be in disarray. While LG could continue to move toward OEM phone development, the LG brand, which is highly regarded in other CE products, is not so in the mobile space, and unless LG management has a particular fondness for losing money, we would expect they would sell or JV out the mobile business this year, hopefully by the end of 1H. Given the circumstances, we expect the few remaining high-quality engineers and developers will get picked off by other smartphone brands this year, if the roster has not already been completely picked over, and little will be left by the time the company makes a final decision if they continue to deliberate.
Here’s the short promo for the LG rollable from CES this year: (ctl+click)
cdn.vox-cdn.com/thumbor/liWFEO6RJdq4XwjK3Ds3rx67Jzk=/0x0:926x518/920x613/filters:focal(389x185:537x333):gifv():no_upscale()/cdn.vox-cdn.com/uploads/chorus_image/image/68859281/lg_rollable_ces.0.gif
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