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LG and Apple's 3.2 billion-device home alliance starts with door locks and cameras
Apple will unveil smart home devices developed with LG Electronics on October 13, a tie-up the Seoul Economic Daily sizes at 3.2 billion devices. That count holds only if LG appliances and Apple phones end up on one platform, which for now is a possibility.
The Investor · Invest desk
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What happened
- The total combines about 700 million LG appliances in use with roughly 2.5 billion Apple mobile devices, against Samsung's estimated 2 billion to 3 billion.
- An unnamed industry official told the paper this is the first time LG has gone beyond TV platform cooperation to jointly develop devices with Apple.
- LG's preliminary third-quarter operating profit was 781.8 billion won against forecasts of about 1 trillion won, on revenue of 23.827 trillion won.
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Why it matters
- constraint With no handset since 2021, LG reaches phone users only on Apple's terms. That limits how much of any shared platform's value LG can claim for itself.
- decision LG is putting investment into AI data-center cooling, a cost that cut its quarter, and leaving the phone side of its smart home to Apple.
- exposure If LG and Apple link everything, Samsung's appliance-plus-handset pitch faces a rival base 200 million devices above the top of its own estimated range.
The 3.2 billion figure adds together two installed bases that are not yet connected: about 700 million LG appliances and roughly 2.5 billion Apple mobile devices [6][15]. It counts devices, so an LG washer in one country and an iPhone in another both raise the total without sharing a home. The Seoul Economic Daily compares that sum with Samsung's combined appliance and mobile base, which it estimates at 2 billion to 3 billion devices [7]. On those numbers the pairing beats the top of Samsung's range by 200 million devices [16], and only if every one of them joins a single platform.
Apple brings about 3.6 devices for every one LG brings [17]. The paper calls the pairing a joint front against Samsung Electronics, which competes with both [1]. LG left smartphones in 2021, and with them went the in-house mobile hub Samsung uses to tie appliances to handsets [2]. Apple has the hub and no appliance line [3].
The October 13 launch can go three ways. In the narrow version, Apple launches a handful of devices co-developed with LG, the smart door locks and security cameras the paper names [4][5], and LG's gain is development work on another company's launch. In the middle version, the appliances work with the phones and each company keeps its own platform. In the wide version, the two run a single ecosystem spanning LG appliances and Apple mobile products, an outcome the report treats as a possibility [23].
I think the evidence so far supports only the narrow version. The one voice in the report is an industry official the paper does not name, who said, "This is the first time LG Electronics has gone beyond TV platform cooperation to jointly develop devices with Apple" [11]. The same official said, "The scope of ecosystem sharing will expand from here" [22]. The counter-case is that a first joint device program is how a wider link would begin, and the official's second sentence says exactly that. The thesis fails if the launch puts LG appliances, and not just locks and cameras, under the control of Apple phones [5].
LG's preliminary third quarter landed the same day. Revenue was 23.827 trillion won and operating profit 781.8 billion won, against forecasts of about 24 trillion won and 1 trillion won [10]. Revenue missed by under 1% and profit by about 22% [18]. The quarter's operating margin was about 3.3% [19]. Subtract the quarter from the year-to-date totals of 71.3807 trillion won in revenue and 4.0346 trillion won in operating profit [9] and the first half ran at about 6.8% [20].
The paper blames LG Innotek, whose profitability slowed as the won strengthened [12], and investment costs from the Eco Solution division's push into cooling for AI data centers [13]. Home appliances, the business an Apple link would connect to, grew across North America, Europe and the Global South [14]. The investment that hurt the quarter went into data-center cooling, while LG's smart home reaches phones through Apple's devices because LG makes none of its own [13][2].
Fortune Business Insights puts the smart home market at $180.1 billion this year and projects 21.4% annual growth to $848.4 billion by 2034 [8], about 4.7 times today's size [21]. What a device partner collects from that depends on how revenue splits between the company that owns the phone and the company that builds the lock. The report does not say who manufactures the October devices or how revenue is divided [4].
What to watch
- LG's full third-quarter report, for whether the Eco Solution cooling investment that cut profit is a one-quarter cost or a new run rate.
- Any disclosure of who manufactures the October 13 devices and how revenue is split, the first figure that would put the alliance in LG's income statement.
- Samsung's next appliance-and-handset bundling move, as a sign of whether it treats the 3.2 billion-device count as a real competitor.