LG launches detachable smartphone, VR devices

LG G5 smartphone
Arjun Kharpal

LG has released a "modular" smartphone which allows users to replace parts of the phone, as well as a camera that can roam your house, in a bid to turn around its struggling mobile operation.

The South Korean electronics company took the wraps off the G5 handset at Mobile World Congress in Barcelona on Sunday which includes the following features:

  • 5.3 inch display
  • Two front cameras that allow a user to take a 180 degree picture
  • An 8 megapixel selfie camera
  • A removable battery

The modular design allows a user to detach the battery and replace it as along with other accessories. LG showed off the LG Cam Plus, a device that can clip onto your phone and give it functionality similar to a traditional camera. It has a wheel to scroll as well as a button that can be pressed to take a picture.

The modular LG G5 smartphone showing the detachable battery
Arjun Kharpal

LG also collaborated with Bang & Olufson to release the HiFi Plus, an amplifier that can also clip onto the phone to enhance the quality of audio coming from the device.

The handset manufacturer has had a difficult few months: Its mobile division reported a 48.3 billion won ($38.9 million) loss in 2015 under stiff competition from the likes of Apple, Samsung and Huawei.

LG will be hoping the G5 can reverse its fortunes. Analysts said the device marks a clear push by LG to appear innovative in the eyes of consumers, but mounting a challenge against the major smartphone players could be a challenge.

"LG has clearly decided that this is the year it wants to step up and make itself more prominent again, as it's been quiet and the fact they are having the biggest press event they have ever done, that speaks volumes in terms of the scale of investment," Ben Wood, chief of research at CCS Insight, told CNBC by phone.

"But the challenge is where do they sit alongside Apple and Samsung who have consistently outspent them in terms of marketing and have a significant market position. It's a big mountain to climb but they have some innovative products to support that."

LG’s VR push

A new smartphone was not the only device launched by LG. The electronics firm also unveiled:

  • The LG 360 Cam, a handheld camera that allows people to take 360 degree video
  • The LG 360 viewer, a virtual reality (VR) headset that look like glasses
  • The LG Rolling Cam, a small soccer ball-sized device that can be controlled via a smartphone and roam around the house. It has a camera built in which can be used for surveillance when you are away from the property. It also allows a user to control anything in the house using infrared such as the TV.

The LG Cam 360 and 360 Viewer launched at Mobile World Congress in Barcelona on Sunday February 21, 2016.
Arjun Kharpal

As the global smartphone market slows down, LG is looking towards new areas for growth, much like many of its competitors. The LG Rolling Cam is a device that attempts to take advantage of the ever-connected home, while the 360 Cam and 360 Viewers are LG's attempt to gain a strong foothold in the nascent VR market.

Virtual reality has been touted as the next major areas with VR and augmented reality headset shipments forecast to grow 15 times to 96 million units by 2020, at a value of $14.5 billion, according to CCS Insight.

LG will be hoping the release of the modular G5 with accessories as well as the new virtual reality devices, will help open up new revenue streams and create a ecosystem around its devices.

"For us, the G5 is the heart of the playground, but as I mentioned we believe people are getting their fun not from smartphones but other tech," Andy Coughlin, head of LG Mobile U.K. and Ireland, told CNBC in an interview.

"We are trying to put the smartphone back in the heart of that tech, in terms of the smart home and the internet of things, the smartphone is the thing we have all the time, so why wouldn't you want to control your heating or car through it?"

Higher margins?

Analysts said that the modular approach to the G5 along with the new devices could help LG open up higher margin opportunities.

"The reason that handset companies are so focused on wearables and other accessories, is that accessories have always been a high-margin opportunity and with the smartphone market becoming so cut-throat it's hard to have high margins and accessories are a massive opportunity," Ian Fogg, head of mobile at IHS, told CNBC by phone.

"As devices get smarter, all new categories open up. It's no longer about earphones, there are all sorts of new categories coming through. There aren't any incumbent leaders in any of these categories. It's all to play for and the margins on many of these devices is going to be significantly better than the margins on the smartphone business."