Despite a vast investment of research, engineering, and marketing, LG's smartphone sales in 2015 were practically unchanged relative to its 2014 totals. Reporting its quarterly earnings today, the Korean company recorded 59.7 million smartphone shipments last year, which amounts to a year-on-year improvement of just half a million. Worse yet, whereas LG was squeezing out a small profit from its mobile division in 2014, last year's total was just south of breaking even, with the fourth quarter resulting in a $37 million loss. Unhappy with its non-existent growth and profitability, LG has decided it will introduce "two new flagship models" in 2016 alongside "a more cost-competitive value chain."
The introduction of two marquee devices in a single year is far from a new phenomenon in the smartphone market. Fellow Android handset makers like Samsung and Sony have made a tradition out of it: Samsung with its Galaxy S and Galaxy Note lineups and Sony with its biannual refresh of the Xperia Z. LG itself got into the same game late last year when it launched the premium V10 handset mere months after the LG G4 flagship.
Mobile World Congress in Barcelona next month will be the stage for the introduction of LG's first flagship smartphone for the year. Expected to be dubbed the LG G5, this Android smartphone has been rumored to have an all-metal design with some unique hardware features such as a dual camera on the back. It sounds like substantial change is in the offing, and given the mediocre commercial performance of LG's previous flagship devices, that might well be a good thing.
LG's mobile division consistently produces some of the most technically advanced phones around, but it's struggled to translate its engineering might into real-world sales. For smartphones to be valuable to LG as more than just engineering showcases, LG will have to prove that it can sell its unique advantages to a global audience and in a supremely competitive environment.