LG G5's slow sales don't bode well for modular smartphones

You can't blame LG for not trying something new. This spring, the company strayed away from the beaten path of monolithic smartphones, and launched a modular phone — the LG G5 — with a sizable ecosystem of additional devices that extend the phone's functionality. 

There's a problem, though: It's not selling.

Following The Korea Times' report last week that LG is reshuffling key execs in its mobile division due to the G5 failing to generate sales, we've reached out to LG for clarification. And while a company rep insisted that this was a partial mistranslation, he did say that the G5 "did not meet the expectations of the market."

The mid-year management realignment, the LG spokesperson told Mashable, is "not unheard of," but it definitely is a result of LG G5's slow sales. LG's focus in mobile, he said, is "not just about one flagship smartphone but the entire lineup," meaning LG's V-series phones and other devices in the company is offering up. 

The simple truth is that the LG G5 is the only mass-produced smartphone that's truly different from the pack, but that doesn't appear to have helped convince people to buy it. 

What does this tell us about modular smartphones? While it's possible that the G5 hasn't been selling well for reasons other than its modularity, we've found it to be quite a capable phone — especially in the camera department — despite being modular. 

Do we really need modular phones?

I believe the answer, at least partially, is in the concept of a modular phone itself. It sounds like a great idea — after all, who wouldn't want to be able to upgrade their phone after a year or two? The LG G5, however, is more about expandability than modularity. You're not going to be able to replace the LG's processor or camera, ever. You can add new functionality, such as camera controls with the camera module, or a hi-fi chip with B&O's module, but those additional modules cost money, and not everyone is prepared to dish additional cash for a few extra features after purchasing a new smartphone. 

The fact that only one G5 module — the LG Cam Plus — is available in the U.S. doesn't help. Frankly, it makes G5's modularity sound much more like a marketing gimmick than a feature that could actually be useful in multiple situations.

As far as true modularity goes, the only part of the G5 you can actually replace is the battery, and this is where it becomes obvious that LG's idea of a modular phone is painfully incompatible with the way the smartphone market works today. 

Ask any user whether they'd like to be able to replace their phone's battery, and I'm willing to bet most will say yes. But when? After a year, two or even three, when the battery life dwindles — all reasonable answers that don't help the G5's sales today. And with carrier contracts and payment plans generally being two-year affairs, many users simply switch their phone for a new one when their contract is up. 

Buying a modular phone is investing in the future. You're getting it now because you hope great things will happen down the line. You also hope you'll be able to save money by simply replacing a part instead of buying a new phone. But are smartphone users today willing to chose a phone based on its upgradeability, or will they simply go for the option they like the most? If G5's sales are any indication, upgrading their phone is the last thing on smartphone buyers' minds. 

What about project Ara?

Besides the LG G5's semi-modular approach, another high-profile modular phone concept comes from Google — Project Ara. While the concept is very different from LG's idea of modularity (Ara lets you replace nearly all of the phone's major components), Ara has an entirely different set of problems. 

Namely, it's just not here yet. 

Not only that — it's been delayed for what seems like forever. Initially announced by Motorola in 2013 (Google had acquired Motorola in 2011), it was shown as a prototype in 2014. I saw another prototype at Mobile World Congress in 2015. But it was then delayed into 2016. And then into 2017. 

There's hope for Project Ara, however. An official developer version should arrive this fall, and then we'll know a lot more about Google's vision of a modular smartphone. 

Google will have to face a similar set of problems to LG's — the fact that paying for extra modules at smartphone purchase might not sit well with a lot of buyers, coupled with the fact that it might take a long time before customers start thinking about upgrading their modular phones. 

But Google has one key advantage over LG — Ara is not a make-or break product for the company. Sure, Google isn't likely to bleed money on it for years, but it can afford to slowly upgrade Ara and push it forward until a portion of the market starts appreciating the benefits of a modular phone. Perhaps, by then, a G6 or a G7 will get more love from buyers as well.