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LG’s Smartphone Prospects in 2025: Navigating AI, 5G, and Flexible Display Trends

General Report July 5, 2025
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TABLE OF CONTENTS

  1. LG’s Strategic Shift Under CEO William Cho
  2. Industry Trends Shaping Tomorrow’s Smartphones
  3. Leveraging Smart Manufacturing for Future Devices
  4. Conclusion

1. Summary

  • As of July 5, 2025, LG Electronics has undergone a pivotal strategic transformation under the leadership of CEO William Cho, shifting its corporate emphasis from the traditional consumer hardware segment, including smartphones, towards the burgeoning fields of artificial intelligence (AI), robotics, and smart manufacturing. This notable pivot reflects a desire to enhance 'structural competitiveness' rather than simply adapting to volatile market demands. The LG of 2025 is not just about adjusting to the trends; rather, it is actively shaping the future landscape through substantial investments in R&D. Notably, by the end of 2024, LG's commitment to innovation saw a 32.1% increase in R&D spending, reaching approximately $3.45 billion, supporting an expanded workforce dedicated to next-generation technology developments. A dynamic two-tier innovation model now facilitates enhancements in product quality while pursuing groundbreaking technologies across sectors, thus augmenting LG's capacity to pivot as market conditions evolve.

  • The smartphone industry itself, as of mid-2025, is rapidly transforming driven by advancements in generative AI, the rollout of 5G networks, and the popularization of foldable and bendable display technologies. LG's strategic withdrawal from smartphone production raises critical questions about its future involvement in this space. Even though the company has deprioritized its smartphone initiative since 2021, it remains poised to leverage its substantial capabilities in AI and robotics should the right market conditions arise for reintegration into mobile technology. Current trends indicate significant growth trajectories for intelligent applications powered by AI, as well as transformative shifts toward flexible devices. While LG is currently operating on the periphery of the smartphone market, its sophisticated understanding of smart manufacturing and logistics places it in a unique position to adapt to any future opportunities that arise in the mobile sector.

  • In analyzing the broader industry landscape, the adoption of generative AI in mobile applications has fundamentally redefined user interactions, enabling more responsive and personalized experiences. Concurrently, the proliferation of 5G technology enhances app functionality while folding devices are reshaping form factors to maximize utility. However, the industry also faces challenges, notably a decline in smartphone shipments exacerbated by consumer trends favoring prolonged device usage over frequent upgrades. This multifaceted and evolving tech environment underscores the critical need for companies like LG to adapt continually, harnessing innovation to maintain their relevance and competitive stature in a market that is as dynamic as it is demanding.

2. LG’s Strategic Shift Under CEO William Cho

  • 2-1. Focus on AI and robotics over traditional hardware

  • Under the leadership of CEO William Cho, LG Electronics has embarked on a significant transformation, emphasizing artificial intelligence (AI) and robotics while moving away from its traditional consumer hardware portfolio. This shift, characterized as one of the most ambitious in the company's history, is designed to enhance 'structural competitiveness' rather than merely responding to the fluctuating demands of the consumer electronics market. As of July 2025, LG has redirected resources and efforts toward integrating smart technologies into its products and services, spearheading developments in sectors such as autonomous service robots and AI-driven applications for business solutions.

  • Cho's strategic redirection is evident in the substantial growth of LG's research and development (R&D) footprint. Since his appointment in 2021, the company has increased its R&D personnel by nearly 10%, with over 21, 600 full-time professionals engaged in this area by 2024. The outcome of this investment is reflected in an impressive 32.1% increase in R&D expenditures, reaching approximately $3.45 billion in 2024. LG's ongoing commitment to a two-tier innovation model facilitates both product-level improvements through business-unit laboratories and foundational technology exploration by the external CTO division. This comprehensive approach is crucial as LG pivots toward next-generation technologies that include increased automation and intelligence across its offerings.

  • 2-2. Corporate priorities and R&D realignment

  • The realignment of corporate priorities at LG Electronics under Cho's leadership involves a dedicated focus on innovation and technological development. As of mid-2025, this has manifested in aggressive recruitment strategies aimed at attracting top-tier talent in AI and robotics. By hosting tech conferences across North America, LG is positioning itself as a leader in technological advancement, showcasing a roadmap that emphasizes innovation in AI solutions. These efforts underscore Cho's vision for an organization capable of leveraging cutting-edge technologies not only within LG's product offerings but also in prospective partnerships with global tech players.

  • In March 2025, Cho's meeting with Microsoft CEO Satya Nadella highlighted collaborative strategies in AI and data management, emphasizing LG's competency in integrated systems, particularly in sectors where its HVAC expertise aligns with emerging technologies. This collaboration indicates LG’s broader ambition to not only innovate internally but also to influence the tech ecosystem through partnerships that harness synergies between AI, cloud computing, and advanced data center technologies.

  • 2-3. Implications for LG’s smartphone business

  • The strategic pivot away from traditional smartphone manufacturing raises important questions about LG's role in the mobile space. As of July 2025, the company has deprioritized smartphones in its core business strategy, which may have significant implications for its future. While LG's exit from the smartphone market was a notable decision in 2021, the organizational focus on AI and robotics may facilitate future opportunities for reintegration into the mobile realm, provided the market conditions become favorable and align with LG's strategic interests.

  • Despite current plans, the evolving landscape of smartphones—particularly with advancements in AI, 5G integration, and flexible display technologies—presents both challenges and potential re-entry pathways for LG. Should the company decide to re-enter the smartphone sector, its established capabilities in AI-driven R&D and innovative manufacturing processes may provide a competitive advantage. Thus, while LG remains on the periphery of the smartphone market for now, the capabilities it is cultivating may lay the groundwork for future innovations that could redefine its approach should it choose to return.

3. Industry Trends Shaping Tomorrow’s Smartphones

  • 3-1. Generative AI integration in mobile apps

  • As of July 2025, generative AI has become a cornerstone in mobile application development, fundamentally altering how users interact with their devices. Advancements in artificial intelligence—particularly the integration of Generative AI—allow mobile applications to become more adaptive, responsive, and context-aware. The use cases for generative AI in mobile apps has expanded to include intuitive features such as real-time sentiment analysis, personalized content recommendations, and voice-driven interfaces, all of which enrich the user experience without relying solely on cloud-based processing.

  • According to a recent report by Futurism, AI has evolved from being a utility feature to a core component of app architecture, enabling a more seamless integration across devices and platforms. This shift is largely attributed to the increasing sophistication of tools like Google’s ML Kit, which supports machine learning directly on Android devices, thus reducing latency and enhancing privacy. The ability to run smart features on-device bolsters user retention and differentiates products in a saturated market.

  • 3-2. 5G and private network adoption

  • 5G technology has transitioned from a buzzword to a critical infrastructure component by mid-2025, significantly affecting mobile app functionality and user experience. The longer data speeds and reduction in latency extend beyond merely improved streaming capabilities—developers are now optimizing apps to be inherently aware of their network conditions. This has led to innovative features such as ultra-HD video streaming, real-time multiplayer gaming, and AR applications adapting functionalities based on the strength of the 5G connection.

  • Emerging reports have highlighted that almost 90% of the mobile shipments in May 2025 were 5G-enabled smartphones, underscoring consumer migration towards devices that leverage this technology. The implications for developers are profound; applications must not only function well offline but also capitalize on 5G capabilities to enhance user engagement through complex real-time applications, better serving the demands of a connected world.

  • 3-3. Rise of foldable and bendable displays

  • The market for foldable and bendable smartphones has seen significant traction in 2025, adding new dimensions to how devices are structured and utilized. Devices such as the Samsung Galaxy Z Fold4 and Huawei Mate X2 exemplify the possibilities of flexible technology, enabling users to switch seamlessly between phone and tablet modes. This adaptability allows businesses to streamline their operations by relying on fewer devices without sacrificing functionality.

  • Market predictions suggest that the bendable smartphone segment is set to exceed $100 billion by the end of 2025, driven by continued innovations in display technology and consumer demand for multifunctional devices. As reported in recent articles from technology outlets, these advancements provide both enhanced user experiences and increased productivity, bolstering the need for apps that can efficiently harness the capabilities of a larger display area.

  • 3-4. Impact of declining shipment volumes in key markets

  • In early July 2025, reports indicated a dramatic decline of 21.8% in smartphone shipments within the Chinese market for May of the same year, demonstrating a significant challenge within the industry. The shift towards longer replacement cycles has been attributed to market saturation and changing consumer preferences, which now lean towards prolonged usage of existing devices rather than frequent upgrades.

  • The downturn reflects broader trends noted earlier in the smartphone lifecycle, especially the inclination towards 5G devices. However, the failure to reverse long-term behavioral shifts—where consumers now keep their smartphones longer—warns of a fundamental challenge that manufacturers must address. New strategies are emerging as firms adapt to this changing landscape, focusing on product differentiation and quality improvements to maintain market stability moving forward.

4. Leveraging Smart Manufacturing for Future Devices

  • 4-1. Private 5G in LG’s US appliance factory

  • As of July 2025, LG Electronics is leveraging a private 5G network at its advanced home appliance factory in Clarksville, Tennessee, to improve manufacturing efficiency. The factory, which has been in operation since its construction in 2017 and designated as a 'Lighthouse Factory' by the World Economic Forum in 2023, integrates cutting-edge technologies such as AI, robotics, and digital twin systems. The shift from Wi-Fi to private 5G, implemented in 2023 due to previous reliability issues, enables the factory to manage a high volume of production without the connectivity drops experienced with traditional networks. This connectivity upgrade supports the operation of around 200 Automated Guided Vehicles (AGVs) and Autonomous Mobile Robots (AMRs), which are crucial for optimizing internal logistics and automating material transportation throughout the expansive factory floor.

  • The implementation of 5G technology also allows LG to transfer vast amounts of data in real-time, facilitating immediate adjustments and enhancing the overall workflow via connected smart applications. Each washing machine produced in this facility is assembled every 13 seconds, and dryers every 11 seconds, underscoring the factory's productivity and the importance of seamless communication across automated systems.

  • 4-2. Smart logistics and digital twins

  • In addition to robotics, LG is advancing its smart logistics capabilities, particularly through collaboration with LogisValley in Korea. This partnership aims to merge LG's expertise in smart manufacturing with LogisValley's established logistics services to develop tailored smart logistics solutions for global markets. Notably, this includes the use of digital twin technology, which creates virtual simulations of logistics environments. By utilizing digital twins, LG can analyze and optimize material flows and robotic workflows before actual implementation, which significantly reduces the risks associated with inefficiencies in logistics operations.

  • Furthermore, LG’s internal operations will also benefit from these smart logistics solutions, as customized systems are being implemented in its appliance logistics hubs. This strategic move aligns with the anticipated growth of the smart logistics market, projected to expand from USD 88.1 billion in 2025 to USD 212.8 billion by 2032, driven by increasing automation in logistics operations.

  • 4-3. Robotics-driven production efficiencies

  • LG's commitment to robotics and automation extends to a wide range of solutions aimed at enhancing production efficiencies within its factories. The deployment of autonomous mobile robots, equipped with AI and computer vision, enables LG to automate traditionally labor-intensive tasks such as box picking, thereby reducing human error and improving operational precision. The integration of these technologies results not only in higher productivity but also in better quality control across manufacturing processes.

  • The digital twin technology employed in LG’s factories allows for live monitoring of robot efficiency, suggesting adjustments in real-time to maintain optimal performance. Such advancements in robotics not only revolutionize LG’s manufacturing capabilities but also serve as a model for future smart manufacturing practices across various industries.

  • 4-4. Potential to re-enter smartphone market

  • With LG's strong foundation in smart manufacturing, robotics, and AI, there exists a significant potential for the company to re-enter the smartphone market. While LG has deprioritized its smartphone division in favor of AI and IoT solutions, the strategic advancements in manufacturing technology provide a resilient platform for developing future devices. If market conditions become favorable and align with LG’s core competencies, the company could leverage its innovations in AI-powered production and smart manufacturing to create smartphones that not only enhance user experience but also integrate seamlessly with its array of connected home appliances and IoT offerings.

  • Such a re-entry strategy would necessitate a careful analysis of current market trends, technological advancements, and consumer preferences, particularly in the context of generative AI and flexible displays, ensuring that LG’s future mobile devices could stand out in an increasingly competitive landscape.

Conclusion

  • As the landscape of technology platforms continues to evolve, LG Electronics's ongoing pivot towards AI, robotics, and advanced manufacturing positions the company strategically for diversified ventures beyond its traditional forte in consumer electronics, particularly televisions and home appliances. While LG has strategically deprioritized its smartphone division, the confluence of generative AI, robust 5G infrastructures, and the demand for flexible display technologies presents a fertile opportunity for potential re-entry into the smartphone market. As of July 2025, there exists a distinct possibility that, given optimal market conditions and a conducive strategic framework, LG could effectively translate its deep-rooted competencies in smart manufacturing and robotics into the mobile sector. This prospect warrants close monitoring as the company continues to innovate across its operations.

  • In addition to a potential return to mobile devices, LG's sustained commitment to R&D and manufacturing excellence is crucial in any forthcoming endeavors. By focusing not only on product advancements but also on developing partnerships within the technological ecosystem, LG can harness its insights to drive new industry standards. The pathway ahead requires diligent analysis of current market trends, with an acute attention to consumer preferences and competitive dynamics, ensuring that, if it chooses to foray back into smartphones, LG's future offerings could be both innovative and compelling. Through fostering agility and leveraging advanced technologies, LG stands to redefine its position within a rapidly transforming tech landscape, nurturing a proactive rather than reactive approach toward its strategic goals.

Glossary

  • LG Electronics: A major South Korean multinational electronics company known for its consumer products and technology innovations. As of July 5, 2025, LG has pivoted from traditional hardware like smartphones to focus on artificial intelligence (AI), robotics, and smart manufacturing.
  • Artificial Intelligence (AI): The simulation of human intelligence processes by machines, especially computer systems. In 2025, AI is a central component of technological advancements, enhancing user experiences through applications such as personalized content recommendations.
  • 5G: The fifth generation of mobile network technology, offering higher speeds, lower latency, and greater capacity compared to previous generations. As of July 2025, 5G enables advanced functionalities in smartphones, including real-time gaming and high-definition streaming.
  • Foldable Displays: Innovative screen technology that allows devices to have flexible screens, enabling smartphones to be used in both phone and tablet modes. This trend has gained traction in 2025 with significant market predictions due to consumer demand.
  • Bendable Displays: A variant of foldable display technology that provides additional flexibility in device design. These displays are part of a growing market for multifunctional devices, expected to exceed $100 billion by the end of 2025.
  • Generative AI: A type of artificial intelligence that can generate new content based on training data. By mid-2025, generative AI is transforming mobile applications by enabling features like sentiment analysis and voice interfaces.
  • Smart Manufacturing: An advanced production approach that leverages technologies such as AI, robotics, and the Internet of Things (IoT) to improve efficiencies and product quality. As of July 2025, LG is integrating smart technologies in manufacturing processes to enhance operational performance.
  • Robotics: The branch of technology that deals with the design, construction, operation, and application of robots. LG has invested heavily in robotics to automate production and improve precision in its manufacturing processes.
  • Smart Logistics: An approach to managing logistics operations using advanced technologies and analytics to optimize supply chain efficiency. LG is enhancing its smart logistics capabilities through partnerships and digital twin technology.
  • Private 5G Networks: Dedicated cellular networks operated by a single organization, providing high-speed connectivity and reliability for industrial applications. LG has implemented a private 5G network in its US appliance factory to enhance operational efficiency.
  • Digital Twin Technology: A virtual representation of physical objects or systems used to analyze and optimize processes. In 2025, LG is utilizing digital twins to simulate logistics environments and improve operational efficiencies.
  • Automated Guided Vehicles (AGVs): Mobile robots used in industrial settings for transporting materials. As of July 2025, LG's private 5G network supports approximately 200 AGVs in its factory, optimizing logistics and automating workflows.
  • Autonomous Mobile Robots (AMRs): Robots capable of navigating and performing tasks in their environment autonomously. LG uses AMRs in its manufacturing processes to enhance efficiency and reduce human error.
  • Market Trends: Patterns or movements in an industry indicating shifts in consumer behavior, technology adoption, or competitive landscape. As of 2025, the smartphone industry faces challenges such as declining shipments and changing consumer preferences.

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