LG Electronics mobile chief Cho Juno speaks in a company event to unveil its V10 smartphone in downtown Seoul, last year. / Korea Times file
By Kim Yoo-chul
LG Electronics has scrapped a plan to unveil the company's new mobile payments system ― LG Pay ― at this year's Mobile World Congress (MWC) in Barcelona.
"LG Electronics has delayed the official launch of LG Pay to the second quarter of this year to help the new LG flagship smartphone ― G5 ― receive more media attention," an LG official said Friday.
The official denied that the decision was made because of poor support from major credit card issuers in the company's target markets such as the United States.
The LG Group's consumer electronics affiliate will hold its unpacked event to launch the G5 on February 21 at the Sant Jordi Club in Barcelona.
The G5, which will have a 5.3-inch LCD display supplied by LG Display, is the first under the leadership of LG's mobile chief, Cho Juno, who is also a de facto CEO of LG Electronics.
"LG can't afford to see another failure of the G5 amid challenging market situations after its earlier V10 smartphone apparently failed to get much traction," said another official at one of LG's technology affiliates.
Since late last year, LG Electronics has been preparing to add the mobile payment function to its smartphone lineup. In November, LG signed a non-binding memorandum of understanding with Shinhan Card and KB-Kookmin Card to promote LG Pay.
It has been said that LG could have the resources to do a universal card for mass markets. The firm's iteration appears to have the standard features ― better display to let users see which card is active, buttons to select them and contracts to keep it charged up, LG officials said.
LG is the latecomer to the mobile payments market, which Google, Apple and Samsung dominate.
Although LG officials have no big concerns about the market potential of mobile payment systems, the successful launch of the G5 has more priority, they said.
LG Electronics also has decided to use space at MWC that was allocated to LG's telecom affiliate, LG Uplus, to promote the G5.
"On the LG Uplus front, LG Electronics' decision not to share space is unsatisfactory; however, we have to admit that LG Electronics feels a sense of urgency to lift its mobile business," the official said.
LG's top management has let Cho, who has long served as chief operating officer (COO) at LG Corp., handle LG's handset business. But Cho's leadership is yet to be proven, given worsening balance sheets.
Last year, LG's handset business reported an operating loss. The company has been forced out of the "top 5" in the global smartphone business because the industry has been reshaped, focusing on price rather than fancy hardware, benefiting budget Chinese vendors.
"If LG Pay fails to get attention from the media as much as the company wants, then things will get worse," the official said. "The G5 will be the message that LG still has the ability to stay with chief competitors."