LG has announced the company will be pushing forward with what the company is calling its “smart life solution” business model. As described by LG, this approach will adopt an ‘as-a-service’ model for most of LG’s current product portfolio—even its TVs and appliances—to generate consistent profits from subscription and ad-based services.
“LG will innovate with a platform-based service business model that continuously generates profits, such as content and services, subscriptions and solutions, to the hardware-oriented businesses, which generate sales and profits at the time of purchase,” LG stated in a press release regarding the announcement.
LG CEO William Cho also stated, “LG will continue to pursue its bold vision to transform and leap forward as a smart life solution company that connects and expands customers’ various spaces and experiences, rather than resting on its current position as the best home appliance brand that provides. We will establish a brand-new LG by reinventing the way we work and communicate toward this goal.”
LG states that this pivot toward an ‘as-a-service’ model is geared towards creating a business model based on customer engagement through its devices. However, prominent consumer-focused magazines such as the Verge have already begun to doubt consumer willingness to buy into an LG subscription plan if that ends up being the case.
These plans follow the company’s gradual exit from both its mobile phone and solar panel business areas, with LG stating that it “plans to accelerate future development by selecting and concentrating on new businesses that are expected to have similarly high growth potential.”
Additionally, the company has stated it will be accelerating business-to-business (B2B) and exploring new business areas such as electronics vehicle charging and digital health
LG to Expand Smart TV webOS as Ad Supported Platform Media and Entertainment Platform
Of its initial smart life solution plans, the company states it will be making a “great transformation” to its webOS operating system, which currently supports the company’s smart TV products, to better position itself as a media and entertainment service provider through its TV business portfolio. This includes adding content, services, and advertisements to its TV hardware.
In discussing it’s TV as-a-service plans, LG states it will “invest more than KRW 1 trillion over five years to strengthen the content competitiveness and drive growth of LG Channels – an advertising-based free broadcast platform.” What this means for the pricing of LG’s television offerings is yet to be determined.
The company states its plans will also include a push towards a more immersive viewing experience through its larger screen TVs through the development of mixed reality features. Research into this is currently ongoing at the Korean Ministry of Science and ICT.
LG has also stated it will be expanding its webOS platform to be supplied to external TV brands, thereby expanding the application of webOS to other product groups, a model not too dissimilar to the distribution of the Roku OS platform currently.
LG Planning ‘Home-as-a-Service’ Subscription Service for Appliances
LG has also noted the development of household appliances into service-based portfolios and has stated its plans to evolve its ThinQ UP appliances into what it is describing as a home-as-a-service platform.
As of right now Samsung is one of the most prominent appliance manufacturers that has adopted this model through its SmartThings home ecosystem and the recent launch of Samsung’s SmartThings Home Life service.
Part of LG’s expansion into this space will involve ramping up its service care business models for product maintenance, management, and cleaning, with LG citing that specific business arm having already experience a compound annual growth rate of 30% in sales over the past five years.
The company also states that this will involve a greater expansion into North American and European markets with its appliances.
Energy Management, HVAC, and Digital Healthcare Part of Future Roadmap
Already LG stands as a prominent manufacturer of EV batteries, supplying the likes of Chevy and Hyundai with its offerings. The company states, however, it plans to double its sales output in this category by 2030 while also expanding its EV charger and home energy management offerings to the United States and Europe within the next.
The company also plans to grow its current portfolio of options in anticipation of the greater demand for home energy systems within the coming years.
Additionally, the company has stated it will continue to grow its HVAC and digital healthcare businesses moving into 2030.
There is current speculation as to what LG means with its acceleration of B2B businesses connections. Whether this will translate into greater outreach into the integration space is yet to be determined, though CE Pro has reached out to see if we can gleam any information regarding it and will update this article upon hearing back from LG.
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