{"text":[[{"start":12.04,"text":"In the era of flip phones, LG Electronics was king. "},{"start":15.869,"text":"“Life's Good”, was how the South Korean group’s marketing slogan put it. "},{"start":19.686999999999998,"text":"But the stronghold made LG too comfortable. "},{"start":22.454,"text":"Its decision to enter the smartphone business later than peers was a costly mistake. "}],[{"start":28,"text":"After 23 consecutive lossmaking quarters, LG is now quitting the mobile industry. "},{"start":33.329,"text":"It is the right decision. "},{"start":34.997,"text":"Years of catch-up spending pushed LG to become the third-biggest smartphone maker in 2013. "},{"start":40.452,"text":"But success was shortlived. "},{"start":42.307,"text":"The company fell behind on new releases and dropped out of the top seven last year, with about 2 per cent of the global market. "}],[{"start":49.65,"text":"LG’s mobile unit accounts for just 8 per cent of sales but most of the group’s losses. "},{"start":54.742,"text":"There is little hope of improvement. "},{"start":56.784,"text":"The gap has widened between the high-end segment, in which Samsung and Apple hold 37 per cent of the market, and the five Chinese makers at the low end. "},{"start":64.639,"text":"Other smartphone sellers account for just 16 per cent of total sales, down from 31 per cent three years ago, according to Counterpoint. "}],[{"start":72.65,"text":"The mobile unit has long been LG’s worst-performing business too. "},{"start":76.742,"text":"Negative operating margins — which fell to minus 17 per cent in 2019 — continue to weigh on the double-digit margins of its lucrative home appliances business, which accounts for 43 per cent of group sales. "}],[{"start":89.23,"text":"That drag is reflected in the market valuation. "},{"start":92.334,"text":"Even after a 200 per cent gain in shares in the past year, shares trade at a 1.8 price to book value — half that of global peers such as Electrolux and Whirlpool. "},{"start":101.864,"text":"In the longer term, dividends of 0.5 per cent, a fraction of Whirlpool’s, should see a boost. "}],[{"start":108.81,"text":"Growth in the smartphone industry is slowing everywhere. "},{"start":112.00200000000001,"text":"Global sales fell 13 per cent last year. "},{"start":114.869,"text":"Even if it does recover, LG’s 40 per cent stake in LG Innotek and LG Display — key suppliers to Apple — will provide exposure to any upside. "},{"start":123.562,"text":"It has made the right move. "}],[{"start":126.28,"text":"Our popular newsletter for premium subscribers Best of Lex is published twice weekly. "},{"start":131.25900000000001,"text":"Please sign up here. "}],[{"start":132.62,"text":""}]],"url":"https://creatives.ftacademy.cn/album/001092040-1617693461.mp3"}