ALTHOUGH LG ELECTRONICS HAS BEEN DRUMMING UP INTEREST FOR ITS NEW premium smartphone, the LG Velvet, the company continues to pursue the lower end of the market as it seeks to turn around its mobile fortunes. LG launched a new budget LTE model, the Q61, into the Korean market in May with a price tag of 369,600 KRW (approximately $306). It is essentially a rebranded version of the LG K61, which was introduced in February 2020 and has hit the market already in Mexico, Brazil, and Canada. The Android-based Q61, which meets US military-grade durability standards, has a 6.5-inch 19.5:9 1,080-pixel LCD, a 2.3-gigahertz MediaTek chipset, 48 gigabytes of storage, and a 4,000-milliampere-hour battery. It also has a 16-megapixel (MP) front camera and a rear quad-camera array with a 48-MP main camera, wide-angle lens, depth sensor, and macro lens. Sales for LG's mobile communications unit dropped 34 percent for the first quarter of 2020 on a year-over-year basis, from 1,510 billion KRW ($1.25 billion) in Q1 2019 to 998.6 billion KRW ($828 million) in Q1 2020. Its operating loss also widened during the same period, from 203.5 billion KRW ($169 million) in Q1 2019 to 237.8 billion KRW ($197 million) in Q1 2020. LG had a 2 percent share of the global smartphone market in Q1 2020 with 5 million units shipped, according to Counterpoint Research, and a 10 percent share of the US market. Although LG already had reduced expenses and labor costs for the mobile unit, the company took a big hit in Q1 because of COVID-19's impact on Chinese equipment suppliers as well as decreased demand from retail store shutdowns, leading to the increased loss, according to its earnings release. OLED displays are steadily gaining share in the smartphone market, particularly at the high end, but LCD still comprises the majority, particularly among 4G models, notes Ross Young, founder and CEO of Display Supply Chain Consultants. While LG Display is winding down LCD panel production for TV sets in Korea this year and scaling back LCD production for other markets such as notebooks and monitors, he expects its low-temperature polycrystalline silicon (LTPS) LCD fabrication plant (fab) in Gumi, South Korea, will continue making LCD mobile displays through 2025. A New Top-shelf Phone LG's premium Velvet series. Image: Courtesy of LG That said, Young thinks LG's more interesting phone launch is the Velvet, which has an OLED display and a price tag of 899,800 KRW ($746). The Velvet has a mid-range Qualcomm processor, a unique waterdrop rear camera design, and a thin, curved body that can be inserted into a special dual-screen case to provide much of the functionality of a foldable phone. Another intriguing aspect of the Velvet, says Young, is that its OLED display is being supplied by China's BOE, not LGE's corporate cousin LG Display. That's because LG Display has dedicated its burgeoning mobile OLED display production in 2020 to Huawei and Apple, which are the second and third highest original equipment manufacturers (OEMs) in terms of total global shipments, behind Samsung Electronics. He adds that 2020 should be a “good growth year” for LG Display's mobile OLED business, with total panel shipments forecast to grow from 12 million units in 2019 to 32 million units in 2020. Young expects Apple to buy 20 to 25 million of those panels for the new 5G phones it's launching this fall. As a result, he predicts LG Display's share of the OLED mobile display market to make a commensurate leap, growing from around 4 percent in Q1 2020 to perhaps 8 percent by Q4 2020. —Glen Dickson
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