LG ditches and ZTE scales back on MWC due to coronavirus

The World Health Organisation declaring the coronavirus a Public Health Emergency of International Concern raises serious concerns about impact will this have on Mobile World Congress.

The annual telecoms bonanza is set to begin in just under three weeks’ time, and while the GSMA might be making the right noises currently, there is concern among attendees and exhibitors. LG is the first company to make a meaningful splash in the MWC waters, deciding to pull out of the event completely.

“With the safety of its employees, partners and customers foremost in mind, LG has decided to withdraw from exhibiting and participating in MWC 2020 later this month in Barcelona, Spain,” LG said in a statement. “This decision removes the risk of exposing hundreds of LG employees to international travel which has already become more restrictive as the virus continues to spread across borders.”

As an alternative, LG will host a number of different smaller events across the world to meet with customers and partners, as well as showcasing the different technologies it has been developing.

This is the challenge which the GSMA faces currently; with c.5-10% of total attendees originating from China and at least 250 exhibitors coming from the country also, questions about safety will be asked.

“The GSMA confirms that there is minimal impact on the event thus far,” the GSMA said in a statement. “MWC Barcelona 24-27 February 2020, will proceed as planned, across all venues at Fira Gran Via Fira Montjuïc and La Farga L’Hospitalet, including YoMo and Four Years From Now (4YFN).”

Measures have been put in place, including:

  • Increased cleaning and disinfection programme
  • Increased onsite medical support
  • Availability of sanitising and disinfection materials for public use
  • Awareness training
  • Advice to exhibitors on implementing effective cleaning and disinfection of stands
  • Installation of new signage regarding hygiene
  • Communicating advice to all attendees to adopt a ‘no-handshake policy’

Outside of the GSMA, ZTE has also decided to make its position known. It will maintain a presence at the show, though it has put several procedures in place to minimise any risk.

Any employees from mainland China will have to exhibit no symptoms two weeks before departure and arrival in the MWC, and also remain in self-isolation during this period. Executives will self-isolate in Europe for the two weeks leading up to the show. ZTE will also ensure booth presentation staff are all from countries outside China, and mainly from Europe.

Other major Chinese companies, including Huawei, are yet to comment.

It remains to be seen how much of an impact the outbreak will have on MWC Barcelona, but a bigger headache might be the MWC Shanghai event in late June.

At the 2019 event, 500 exhibitors and 75,000 industry professionals attended the conference. 50% of the exhibitors were from outside China, and while 23% of the attendees were international. More than 100 countries were represented at the 2019 event.

While some might be nervous about attending MWC Barcelona during the outbreak, we suspect there will be a lot more people in aggressive opposition to travelling to China unless the Coronavirus has been dealt with.

LG drives towards connected car market with Cerence tie-up

LG has signed a memorandum of understanding (MOU) with Cerence to make a play for the emerging connected car market.

The partnership with Cerence, which has recently spun-off from Nuance Communications, will integrate LG’s webOS Auto In-Vehicle Infotainment (IVI) system with Cerence ARK (AI Reference Kit), to create a new voice assistant for the connected car market.

“We look forward to this collaboration with Cerence to develop a turnkey voice solution for today’s auto and component makers to accelerate the arrival of the connected car,” said I.P. Park, CTO of LG Electronics. “We will continue to evolve webOS Auto by offering a wider range of AI-powered experiences for both manufacturers and auto customers.”

“We are honoured and excited to partner with LG Electronics on a solution that harnesses the collective power and promise of webOS Auto and Cerence ARK,” said Sanjay Dhawan, CEO of Cerence. “This new offering will support automakers and tier-one suppliers as they rapidly innovate, speed the time to market, and deliver a state-of-the-art in-car experience unlike any other.”

Although still in the early days, the connected car market is accelerating very quickly. LG might be a bit a late to the party here and will have to scrap with some big names from Silicon Valley, the telcos and the OEMs themselves.

Looking at the internet segment, Google has been making promising steps forward with its Android Auto in-car platform, while Amazon has Echo Auto, and Apple has CarPlay to steal some share of the connected car segment. The likes of Huawei and Ericsson are also trying to wrestle attention in the space also.

Albeit distant competitors, some telcos have also shown ambitions to play a greater role in the connected car segment. While it does look like the telcos are destined to be the commoditised connectivity partner, the fortunes of this industry are far from settled.

Finally, you have to consider the car manufacturers themselves. The likes of BMW, Seat and Ford want to create a lasting relationship with customers to drive towards a more sustainable industry in the future. Simply selling and maintaining cars might not be enough but owning the in-car experience is one way to create value and new potential revenue streams.

The winners and losers of the connected car segment are far from settled, but this is quickly becoming an incredibly competitive environment.

LG promises mobile profits by end 2021

LG’s new CEO has promised to recover the lost fortunes of yesteryear, driving the mobile business unit towards profitability within two years.

After a pre-Christmas game of management musical chairs, LG’s new CEO Brian Kwon is quickly setting to work. Some might set themselves an easy task for a new job and new year, but Kwon is diving into the deep-end to tackle the former money-making machine and current problem child of the LG family; the mobile communications business unit.

“LG Electronics mobile business is going to be profitable by 2021,” said Kwon. “I can say we can make that happen as LG Electronics will expand our mobile line-up and steadily release new ones attached with some wow factors to woo consumers.”

In an industry which is desperately starving for and disastrously struggling to provide innovation, what Kwon envisions to woo customers remains to be seen. Details were very thin on the ground, but the mobile division certainly needs a jolt from somewhere.

Year-on-year, the mobile communications business has not been performing. For the third quarter of 2019, sales declined 24% compared to 2018, where as the unit declined 21% in the second period and 29% in the first. 2019 was a pretty disastrous year for the mobile business, though fortunes have been slipping away for years.

At the beginning of the last decade, LG was very much a different kind of player in the mobile market. In fact, it is quite remarkable the way the market has shifted over the course of ten years.

Brand 2019 Q3 Shipments Year-on-year 2019 Q3 Market share
Samsung 78.4 8.4% 20.6%
Huawei 66.8 28.4% 17.6%
Apple 44.8 (4.6%) 11.8%
Oppo 32.7 (3.5%) 8.6%
Xiaomi 31.7 (4.8%) 8.3%
Vivo 29.5 (3.2%) 7.8%
Realme 10.2 684% 2.7%
Motorola 10 (13%) 2.6%
LG 7.7 (26.7%) 2%
Tecno 5 8.7% 1.3%

2019 Q3 smartphone shipment estimates from Counterpoint research

Although the likes of Samsung and Apple would have been at the top of the leaderboard at the beginning of the last decade, everyone else has gone through a considerable shake-up. Several of the leading manufacturers today did not exist 10 years ago, while some brands have not aged well. HTC, Nokia, Microsoft and Blackberry are all extinct, while LG and Motorola are two shadows of their former heavyweight stature.

The world has been captivated by the newly-emerging Chinese brands, with Huawei leading the charge. These companies have been regularly stealing market share, and profits, from some of the older smartphone brands and it will take some big moves to counter these trends. LG still controls a useful 10% market share in the US, though this is shrinking year-on-year and is perhaps down to the anti-China sentiment in the country as opposed to anything else.

Although the LG picture is not the prettiest, there are some useful ideas coming out of the division. What is also worth bearing in mind is this is a consumer electronics giant which produces some excellent products. The mobile business unit is suffering, not necessarily LG on the whole.

Looking at the products on offer, one of the more interesting in recent months. The LG G8X ThinQ is a dual screen product, addressing multi-tasking and increased screen real estate trends, but thanks to the modular design, consumers do not have to carry around bulky devices or worry about breaking folding screens. It is a very useful product, albeit niche.

Turning around this performance will certainly be a challenge for Kwon and the newly appointed management team. Not only will internal issues have to be sorted, external momentum and brand popularity will have to be considered. LG is no-longer considered to be a top-end mobile brand, as rivals have stolen the thunder.

LG joins the virtue-signalling crowd with AI standardisation plug

LG is the latest technology company to humbly join the ranks of technology disciples preaching standardisation and, of course, its idea is better than everyone else’s.

The Consumer Electronics Show (CES) is in full-swing in Las Vegas, and in the midst of a swathe of technology announcements, LG found some spare time to lecture the room on the importance of a standardised approach to artificial intelligence. That is, of course, before being joined on stage by a partner to talk about how it has developed its own framework, adding to the growing wave of fragmentation.

The technology industry is one which elects to stretch the definition of certain words and phrases to such a degree many will wonder whether the dictionaries are thought of as ancient artefacts to be revered but never given attention. In the ‘C’ section, LG President and CTO I.P. Park might find the word ‘contradiction’, and it might offer some insight to read the definition.

Looking around the world, the European Commission has put together a group to create an ethics framework to guide the development of AI, Facebook has backed a German initiative called the ‘Institute for Ethics in Artificial Intelligence’, the UK Government has formed its own AI Council, the US has launched the ‘American AI Initiative’, Google created ‘DeepMind Ethics & Society’ and there are countless others.

Each of these parties are aiming to develop a standardised approach for the development of AI, weighing up the commercial ambitions of industry alongside privacy issues, the risk of bias and the preservation of fairness in a currently lop-sided digital economy. Each party is attempting to ‘own’ the space, dictate the conditions of the playing field for the benefit of its own interests.

This is where self-righteous executives preaching the benefits of standardisation have to be taken with a pinch of salt. The more frameworks which are in place simply heightens the risk of fragmentation. In this case, LG is pursuing its own agenda, implementing a framework to achieve its own aims under the guise of enhancing co-operation and standardisation.

These statements reflect badly on LG, but everyone in the industry is doing exactly the same. The European Commission, the White House, Downing Street, Google, Facebook or whoever. These standardisation frameworks are all slightly different because they serve the aims of the puppet masters.

From LG’s perspective, AI is the future. This is a company where the heritage is in consumer electronics but is positioning itself to capitalise on the growing interest in ‘intelligence’ and embedded connectivity in everything and anything. LG’s robot vacuum cleaner will not only recognise patterns, but also collect data to learn from previous mistakes, such as getting stuck in gaps and corners.

This of course is not a new idea. Embedded ‘intelligence’ and the ability for products to learn and adapt, has been discussed at length for years. LG is perhaps behind the trend, though as the industry is yet to achieve mass market adoption, there is still time for it to catch up. However, whenever someone talks about standardisation, be wary.

There is a reason this party is not joining an existing group, it probably does not serve its own ambitions the most effectively. Instead, we are probably likely to see the creation of more groups, alliances, councils, think-tanks and boards. Standardisation is the aim, but fragmentation is looking much more likely.

LG kicks off massive game of management musical chairs

With a new CEO, CFO and CSO, as well as new Presidents for the Home Entertainment and Mobile Communications units, the LG management team is looking very different.

LG is a company which has always maintained a relatively strong position in the global technology markets, though it hasn’t really pushed forward in recent years. Its always been there or there abouts, but perhaps a refreshed management team and strategy will generate some momentum. With more shuffling than a suspect youth on a street corner during the witching hours, LG are not doing anything by halfs here.

Starting at the top, Brian Kwon has been promoted from his position as President of the Home Entertainment business to Group CEO. Having worked for the business for more than 30 years, Kwon has most recently been managing the successful Home Entertainment unit. In the most recent quarterly reports, this group grew 3.5% year-on-year, the latest in a string of positive results.

Elsewhere at the top-table, Bae Doo-yong assumes the role of CFO having spent seven years slaving away in the tax team, while the newly-created position of Chief Strategy Officer will be taken by William Cho. Cho, who was head of the North American business, will be tasked with overseeing the on-going digital transformation initiatives at LG.

With Kwon taking the CEO role, Park Hyoung-sei will assume responsibility for the Home Entertainment division, while in Mobile Communications, Morris Lee will take the top job. Lee perhaps has the most difficult task of the newly-appointed executives, as LG’s mobile division continues to toil.

While LG was once a prominent brand in the mobile world, this is no-longer the case. The division is haemorrhaging cash, the third-quarter financials saw a 24.5% year-on-year decline in revenues, as new players are stealing the thunder. The likes of Huawei, Xiaomi, Oppo and Vivo are perhaps capturing market share in the mid-tier markets LG formerly enjoyed.

Alongside all of these changes¸ the team has also said it will invest more significant in ‘future core and common technologies’. In more accessible language, this means more money for R&D in AI, software and robotics.

The company has stated it would like to usher in a new era for the company, bringing a more youthful edge to the management team. All new appointments will assume their roles on January 1, 2020.

LG doubles down on games and multi-tasking with new dual-screen

LG first started touting its smarts with a dual screen at Mobile World Congress in February, but at IFA it has launched the LG G8X ThinQ, an updated version of the concept.

Although this is not a product which will be applicable to everyone, its an idea which we like. There aren’t too many updates here, but the fact LG is persisting with this form factor indicates there is appeal to the niche audiences it has been targeting. Perhaps this is the step-change in form factor the industry has been searching for.

“LG Dual Screen is now a proven form factor, highly regarded for its practicality and the world of multitasking possibilities it opens up,” said Brian Kwon, President of LG’s Mobile Communications and Home Entertainment business units. “We’ll continue to expand the LG Dual Screen ecosystem through strategic partnerships and upgrade our innovation in meaningful ways to bring consumers a differentiated user experience.”

The concept is relatively simple. Thanks to a connectable module, the LG device folds open into two, separate and potentially independent screens. One device can be removed from the module, to take phone calls for example, and a smaller screen has been introduced to the outside of the module so users can see messages, battery charge and the time without opening the device, similar to notifications which pop-up when screens are locked nowadays.

This device will have its critics. Some will question the point, the size, weight and bulkiness, and also the price. However, this device has not been designed for those naysayers. Instead, it has been produced with multi-taskers and gamers in mind. And we like it.

The mobile space has been crying out for something new for years. Some might suggest one of the reasons smartphone shipments have been slowing recently is down to a lack of innovation. Manufacturers are asking for more money off cash-strapped consumers without offering anything new to shout and scream about.

Each time the launch of a new flagship device approaches, there seems to be more of a focus on creating a sense of brand. This is of course a reasonable approach to marketing and engagement, though it might also be explained by the fact there are no new features to shout and scream about. At the launch events, it becomes tedious to listen to executives plug incremental gains on cameras, battery or screen size; it’s boring.

Like the foldable phone, this is genuine innovation. It is a slightly different twist on the foldable devices, but it perhaps does address some of the issues which the manufacturers have been facing.

If there are problems with the joint in foldable devices, the separation of screens will address this. If it is too bulky, you can pop-out one of the screens in the LG device to take phone calls. It also has independent screens.

This is a genuine USP will creates a talking point and will appeal to a niche audience. Those who like to watch content on their commute to work while also answering emails. Multi-taskers are a niche, but they are becoming increasingly more common, just have a look at how many people are on their phone while watching TV. It also puts a new twist on gaming, with developers now able to separate the control and gameplay functions onto two separate screens.

And it couldn’t have been launched at a better time.

Huawei has recently unveiled the details of its new flagship device, and it will be functioning without any of the Google applications and services. There will be numerous smartphone users around the world who will turn their back on Huawei now, customers without a cause. This void will create opportunities for the Android smartphone manufacturers. Huawei’s loss is of course a gain for rivals.

This is an interesting device, and while it will not be for everyone, perhaps the days of mass market innovation to drive new appeal are over.

LG doubles-down on gaming and entertainment with K-Series launch

With IFA just around the corner, it would be fair to assume a tsunami of consumer devices launches are on the horizon, and here, LG has kicked-off its own efforts.

The mid-range K50S and K40S smartphones will be available for consumers in Europe, LATAM and Asia to purchase in October, and it appears LG is continuing its quest to find a niche in the gaming and entertainment world.

“These new K series devices offer an optimized multimedia experience that are competitive with the best smartphones in the price range,” said Morris Lee, SVP of mobile communications at LG. “With enhanced screens and more versatile cameras, the K50S and K40S represent exceptional value that demonstrate LG’s commitment to putting consumers’ needs first.”

The devices themselves bring larger screens than previous models, 6.5-inch for K50S and 6.1-inch for K40S, as well as a shift in the placement of the front-facing camera to maximise real-estate. New audio components have been introduced with DTS:X 3D Surround Sound, while a 4,000mAh battery for the K50S and 3,500mAh for K40S will offer extended usage. Both devices run on the latest Android OS, Pie.

Looking at the chipset, both models will incorporate 2.0 GHz Octa-Core, promised to enable smartphones to carry out more advanced tasks such as handling high resolution videos and graphic-heavy games without draining the battery, making the devices capable and efficient.

Gaining attention from today’s consumer can be a tricky task, and while other manufacturers largely seem to be focusing on narcissism with advanced cameras and AR features, LG appears to be focusing more acutely on gaming and the consumption of content.

We have already been treated to this strategy at EEs 5G launch back in May, when Head of LG Mobile UK Andrew Coughlin showed us the 5G prototype device. The product has been designed with multi-taskers in mind, with the option to clip the smartphone into a separate model, adding a second screen. The screens work independently, allowing for two applications to be run simultaneously, or potentially together with the bottom screen acting as a controller for games.

This is strategy which appears to be spread throughout the portfolio, and it is a smart idea.

Gaming is one of the fastest growing markets in the digital economy, and with the emergence of more cloud gaming platforms such as Google Stadia or Nvidia GeForce NOW, accessibility will also increase. A recent report from PwC suggests the German gaming market will grow by 5.2% a year between 2019 and 2023, though this seems to be moderate growth in comparison to other markets.

Research from GlobalData suggested the globally the video games market generated $131 billion, though this could increase to $300 billion by 2025. The surge in growth will be led by smartphone gaming, though as the newly emerging cloud gaming platforms are somewhat of an unknown entity, who knows what the actual figure will be.

On the entertainment front, there is no secret consumers like to watch content on their smartphones, but again, this is becoming increasingly accessible thanks to larger data tariffs and improved wifi in public spaces.

LG will have to do a lot to cut through the noise considering the massive marketing budgets of its rivals but craving a niche in the gaming and entertainment arena is certainly a smart move.

LG muscles in on competitive AI chip space

LG has unveiled has developed its own artificial intelligence chip in an attempt to muscle in on this increasingly competitive segment of the semiconductor market.

The AI market is proving to be rewarding for those who can prove their worth, and each day there seems to be a new ‘thought leader’ entering the fray. While there is a feeling AI could benefit application developers (Uber, Cruise, Waymo etc.) and internet companies (Amazon, Google, Microsoft etc.) more than the semiconductor giants, there will be winners and losers in this segment also.

“Our AI C​hip is designed to provide optimized artificial intelligence solutions for future LG products,” said IP Park, CTO of LG Electronics. “This will further enhance the three key pillars of our artificial intelligence strategy – evolve, connect and open – and provide customers with an improved experience for a better life.”

Nvidia might have made a run at this segment in the early days, though considering its experience lies in gaming applications, whether it can mount a serious challenge remains to be seen. Graphcore is one which has attracted investment from the likes of Dell, Microsoft and Samsung, while AMD, Intel, Huawei, Google and Qualcomm (as well as numerous others) are making this a very competitive space.

As with Intel in the PC-era and Qualcomm’s continued dominance in mobile, some might suspect there might be a clear leader in AI also.

LG has stated its chip will feature its proprietary LG Neural Engine to better mimic the neural network of the human brain. The aim is to distinguish space, location, objects and users, while hoping to improve the capabilities of the device by detecting physical and chemical changes in the environment. As with every AI plug, LG is also promoting the ability of on-device processing power.

Looking at the approach from LG, the team are targeting quite a niche aspect of the AI segment; the smart home. This makes sense, as while LG has a smartphone business, the brand is perhaps primarily known for its home appliances range.

During the last earnings call, the LG mobile business continued to struggle in a sluggish and cut-throat market, reporting a 29% year-on-year drop to $1.34 billion, though the home appliance market soared. Revenues and profits soared to record levels, accounting for more than 80% of the total profits for the business over the three months.

Future products, such as washing machines, refrigerators, and air conditioners will be fitted with the devices, as ‘intelligence’ and personalisation become more common themes in more generic and everyday products.

Maybe the smart toilet isn’t that far away after all.

Samsung and LG set to launch 5G smartphones in February

The Korean media has reported that the world smartphone leader Samsung and its struggling compatriot are going to launch the first 5G smartphones at MWC and ship in March.

According to a report by the Korean media outlet Pulse, citing its industry source, that both Samsung and LG will debut their 5G smartphones in February next year. Volume shipment is expected to start in March, which will synchronise with the start of 5G service for consumers by the three operators. All three of them launched limited 5G services for business simultaneously at the beginning of December.

Mobile World Congress has long been the venue for Samsung to showcase its latest Galaxy flagship product. It will be the series’ 10th iteration next year, so we can expect quite a bit of fanfare to go with the occasion. Whether the Galaxy 10 will be built on 5G, or there will be a 5G variant of the product, is up to speculation.

LG has seen its smartphone market share shrinking in recent years and already posted over $400 million loss in the first three quarters of the year. As a result, the head of its Mobile Communications business was replaced one year into the job. LG would desperately need something to excite the market if the company still decides to stay in the handset market. The expected 5G product could be a new model of its flagship G series, or the new head of its mobile business could decide to rewrite its product portfolio.

Both companies are expected to build their first 5G smartphones on the newly launched Qualcomm Snapdragon 855 chipset, which we have reported in detail. Samsung was one of the illustrious partners to adorn the launch event, but LG was absent. With a long line of OEMs, especially the Chinese smartphone makers showing strong interest in the new Snapdragon, we can expect more 5G handsets to be launched in Barcelona come February than those from the Korean stalwarts.