LG can do without smartphones. The company is betting on household appliances for a reason
LG may not be the best known manufacturer of smartphones, but it does not have to be. The Korean company is doing great in other segments, especially in home appliances.
Huawei in the face of the ban crisis imposed on the Chinese company by Donald Trump convinces that it can even produce tractors. Even if in the short-term perspective it turns out to be a blow, and smartphones are a lucrative business, then for huge Asian corporations only one of many branches of activity. This applies not only to companies based in China.
I spent the last week in South Korea, where I was able to observe how the LG market is doing on the domestic market, which is one of the largest producers of consumer electronics in the world. The company, existing for decades, which formed the foundation for Android's success years ago, proves at every step that smartphones are not needed for happiness at all.
The losses on the mobile market are more than covered by other departments - and there are quite a few of them.
LG really is ... 69 different units. There are so many of them that even the high-ranking moloch workers with disarming honesty admit that they are unable to name everybody from memory. However, they note that the LG Corp holding. it is divided into three main sections:
- Electronics - a total of 16 different companies, including LG Electronics, LG Display and LG Innotek;
- Chemistry - more, that is 24 companies, including LG Chem, LG Household & Health Care and LG Hausys;
- Telecommunications and other - a total of 28 units, including LG U +, LG CNS and LG Sports.
Although in the segment of electronics of individual enterprises is the least, they are responsible for as much as 55 percent. from $ 142 billion LG income. The chemical segment, in turn, is responsible for 25 percent. while telecommunications - the company is one of the operators in Korea and the pioneer of 5G - brings them 20 percent.
LG employs over 72 thousand people worldwide. employees in 140 branches located all over the world. It is true that most of them still - exactly 52 percent. - located in Korea, but LG has been a global company for years, which has local branches in 140 places.
Electronics - in principle what?
When I think about LG, in the first moment I have smartphones in front of my eyes, but only because it is now the most sexy category of products. However, the Korean company does not have spectacular successes in it - it rules in the world of televisions thanks to OLED panels.
In fact, LG shines somewhere else: in the household appliances segment. LG Home Appliances & Air Solution is responsible for as much as 32 percent. from $ 54.5 billion revenues from consumer electronics in LG. Next in order of 26 percent. shares is Home Entertainment department, while smartphones are only 13 percent.
Nevertheless, in the foreseeable future LG will not give up on smartphones.
The company realizes that smartphones are at the center of consumer interest. LG measures strengths on the intentions and realizes that it will not be a player for Samsung or Apple in this segment. Nevertheless, the company does not want to give up this market completely, despite losses.
LG does not rule out that in the future it will change its strategy and, for example, start offering only premium products or will attack the medium shelf more strongly. However, decisions have not yet been taken. For now, the company does its own in the RTV and home appliances segments, where it puts, among others, for artificial intelligence.
Voice assistants will be the key to success.
At a meeting with high-level representatives of the company - Jinkyu Jung, Sungmin Park and Mario Shin - I had the opportunity to ask how LG wants to encourage the purchase of different products of this particular brand. Are there benefits from the product ecosystem?
I learned that the key here is integration with voice assistants. LG does not balance the open door and puts openness on the nomen omen . Instead of a stick in the form of a proprietary and closed system, he wants to cooperate. This is where the support for Amazon Alex and Google Assistant came from.
Added to this is artificial intelligence.
During my stay in Korea, I had the opportunity to participate in the presentation of new products, such as washing machines, microwaves, refrigerators and air conditioners. I also visited both factories (in which unfortunately you could not take pictures), as well as numerous showrooms in which LG flexed its electronic muscles.
According to the manufacturer, new household appliances are, of course, faster, stronger and better than their predecessors in every respect. Let's agree, however, that few who really excite the fact that the new washing machine will fit a bit more of the washing, and the new refrigerator is cooler than the previous one.
Equipment from the household appliances category is purchased not for a year or two, but for decades.
New washing machines or microwaves are not compared with bated breaths with their predecessors. However, the word "lockpicks" arose to attract the attention of consumers. One such expression is artificial intelligence , which electronics manufacturers, somewhat exaggerated, change by all cases.
Kenneth Hong, the senior director of the Business Support Division at LG, with a smile on his lips reassures that the rebellion of machines - at this moment - we are not threatened. Nevertheless, the use of artificial intelligence has allowed the company to improve products to an extent unattainable so far.
What's new in home appliances from LG?
On the site in Korea, LG boasted four new products. Two of them, ie a washing machine and a fridge, have already been directed to our market. The other two, i.e. microwave and air conditioner, so far available only on other markets, but it is possible that they will go to us.
LG TwinWash - washing machine with artificial intelligence support.
The new model of the washing machine is equipped with two drums. The main, bigger, is loaded from the front. In addition, you can pack the laundry in a second, smaller one. It was in a pull-out drawer. Thanks to this, you can do different types of washing at once - ie, for example, colored and white, ordinary and delicate - depending on your needs.
A new feature is the system that detects not only the weight of the laundry, but also the type of fabric. Thanks to this artificial intelligence - Artificial Intelligence Direct Drive, AI DD - selects the washing parameters so that by 18% on average. reduce the wear of fabrics. As a result, you can use your clothes longer.
This is not the end of the new LG TwinWash. The manufacturer took care of the new washing mode within the TurboWash 360 technology called Fast Wash, which lasts only 39 minutes and the fabric smoothing mode - Wrinkle Care. In addition, the capacity of the main drum increased by 32 percent. without increasing the external dimensions.
LG Bottom Freezer - fridge with freezer.
The new LG fridge cools even better than previous models. It is able to maintain the temperature with an accuracy of 0.5 degrees Celsius. Each shelf - whether inside or on the door - is cooled to the same extent. There were 9 air outlets, and the backs became flat at last.
LG Bottom Freezer has a higher capacity while maintaining the same dimensions, and uses much less electricity. Added to this is the Insta View panel, which allows you to view the contents of the refrigerator - just knock on it twice.
LG Neo Chef and LG DualCool - microwave and air conditioner from LG.
Another new product in the company's offer is the Neo Chef microwave. Its advantages are smooth power regulation and the fact that it heats products almost evenly. Fluctuation of temperature between the top and interior of the dish is just 3 degrees - not 23 as in the classic products in this category.
In the case of air conditioners, the LG DualCool is distinguished by a double cylinder, which is unparalleled in this price range. The use of this solution allows to increase the efficiency of the device - the cylinders can rotate faster without introducing the mandrel into dangerous vibrations.
LG also boasts LG Signature equipment and robots
It is a separate brand of equipment for the most demanding customers. They are not even decorated with a distinctive logo, and still, because of the performance, they were eye-catching at the exhibitions at the LG Best Shop store and at numerous showrooms located in the LG factories and factories that I visited.
Added to this are various robots - from autonomous vacuum cleaners, through anthropomorphic assistants from the LG CLOi series, to specialized machines used in industry. In addition, there are subassemblies for cars that LG sells to auto-moto manufacturers.
And all this and only the tip of the iceberg. Looking at all this, it's easy to understand why LG is not particularly worried about the smartphones segment. In contrast to such an Apple, for LG phones are just one of the dozens of branches of activity.
LG can do without smartphones. The company is betting on household appliances for a reason
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