April 27, 2024

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[THE INVESTOR] LG Electronics appears to be taking lesser risks with its new flagship smartphone G6 after the dismal failure of its predecessor G5, the industry’s first modular smartphone.

According to multiple sources on Feb. 10, the Korean tech giant has decided to ditch some high-end features such as Qualcomm’s newest chipset, organic light-emitting diode screen and mobile payment system for the upcoming G6, while launching the phone in March, almost a month earlier than usual. 

LG G5

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Sources said the G6 will use Qualcomm’s Snapdragon 821 processor, not the latest 835, as the manufacturer Samsung Electronics is still struggling to beef up the yield rate.

“If LG wants to use the 835 chip, it seems unavoidable to delay the G6 launch to May or later. Instead of doing so, LG has decided to advance the launch to secure an earlier edge, especially before Samsung Electronics’ Galaxy S8,” an industry source said on condition of anonymity.

The 835 chip has improved energy efficiency and processing speed by some 30 percent overall compared to the current 821. Due to the delayed production, the first batch of the 835 chip is likely to be supplied to the Galaxy S8 that is rumored to hit the market in mid-April.

“Most consumers may not recognize big differences but LG is losing one of the key selling-points,” the source said.

LG has also failed to adopt OLED screen for the upcoming G6.

Samsung uses OLED for almost 70 percent of its smartphone models, including the flagship phones, supplying panels for Apple’s first OLED iPhone that comes out in September.

With the planned adoption by Apple, Chinese handset makers are also increasingly rolling out their own versions of OLED phones.

While Samsung Display, the display-making unit of Samsung Electronics, dominates almost 95 percent of the mobile OLED market, LG’s sister firm LG Display plans to start production as early as next year.

“LG Display made all-out efforts to adopt OLED for the G6 but the yield rate was still too low. It aims to supply the panels first for Apple next year,” said another source who wished to be unnamed.

LG said the G6 will feature a liquid-crystal display-based 5.7-inch “FullVision” screen that covers most of the front panel of the device.

Other confirmed features include the industry’s highest-level water and dust resistance and Google Assistant, the artificial intelligence assistant system. The phone has also upgraded batteries to prevent overheating.

Its own mobile payment system, tentatively called LG Pay, will not be launched for the G6. LG had planned to launch a card-type mobile payment system but the plans were ditched due to the lack of practicality. The firm is working on a new embedded system.

The G6 comes at a crucial juncture for LG that suffered an operating loss of 1.2 trillion won (US$1.05 billion) last year in its smartphone business alone. 

Local analysts say the G6 can better appeal to consumers compared to the G5 that requires extra accessories to upgrade camera and audio functions.They estimate about 6 million shipments for the G6, almost double that of the G5.

By Lee Ji-yoon (jylee@heraldcorp.com)