When LG Electronics announced that their 2016 flagship phone, the G5 will have an "always on" display, this spurred speculation that it uses an OLED display (which makes sense as an LCD will require much more power in such a mode) - but here at OLED-Info we estimated that LGD will not be able to produce enough OLED panels for a new LGE flagship.
LG unveiled the G5 today, and indeed it uses an LCD - a 5.3" 1440x2560 one, in fact. This new smartphone is exciting early reviewers with it good looks, high-end specs, removable battery and plug-in modules.
LG Display produces OLED displays, but in a very limited capacity, in a Gen-4.5 fab (14,000 monthly substrates) that produces flexible (plastic-based) OLEDs. LG currently mostly makes small flexible OLEDs for wearables (such as Apple's Watch and LG's own Watch Urbane 2). LG makes a single handset flexible OLED, the curved 5.5" FHD panel adopted in the company's own G Flex 2 - but this was never really a mass produced device.
LGD announced plans to build a Gen-6 (1500x1850 mm) flexible OLED fab in a $900 million investment. The new E5 line will be located at LGD's Gumi Plant and will have a capacity of 7,500 monthly substrates - or 1.5 million 5.5" panels. The new fab is scheduled to begin mass production in the first half of 2017 - maybe then LG will have enough OLED capacity for a new flagship smartphone...
There are some reports that LG Display does aim to enter the mobile phone market with its flexible OLEDs, and actually aims to do so in 2016 - but they will probably start with lower-volume phones (reportedly LGD is in talks with Chinese phone makers Vivo and Oppo).
The G5 has an optional VR headset, similar to Samsung's Gear VR, although LG's solution uses its own display and not the G5's display - it has dual 1.88" 960x20 displays. Most VR headsets on the market use OLED displays (due to the slow response time of LCDs) - it'll be interesting to see if LG's 360 VR headset use an OLED too. Update: The 360 VR headset uses 1.88" LCD panels, not OLEDs.