LG might ditch smartphone business
In a recent event, LG released its new rollable smartphone, which generated a lot of buzz for the brand. Tech enthusiasts have expressed excitement for the mass distribution of the innovative device later this year. But despite this development, LG is reportedly considering ditching the smartphone business.
On January 20, The Korea Herald released a report saying that Kwon Bong-seok, the CEO of the South Korean consumer electronics company, sent out a message to LG’s employees saying the company is weighing its options regarding its smartphone business, which include selling off its smartphone wing.
However, Kwon was quick to reassure his employees: “Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry.”
So, what prompted LG to consider implementing such a drastic change? During the earlier years of the smartphone, LG was one of the frontrunners in the game. However, when other consumer tech companies began to gain more traction, LG gradually took a back seat. Nowadays, when you think of smartphones, Samsung and Apple are two of the most prominent companies that first come to mind—and LG is seldom remembered.
Another company official had this to say to The Korea Herald: “Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice… The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
LG has been experimenting with their smartphone offerings over the last few years, but none has disrupted the market and boosted LG’s smartphone sales. One of its most notable offerings was the LG Wing, which featured a swiveling screen, but one mobile device is not enough for the brand to keep up with the competition.
The company has been operating on a loss for 23 consecutive quarters since quarter two of 2015. Over the last five years, LG’s accumulated loss has reached a total of 5 trillion won, or $4.5 billion.
The company ditched their brand G series and launched the LG Velvet and the LG Wing, but they still haven’t been able to regain their spot as one of the leading smartphone producers in the world. According to Counterpoint, LG had shipped out only 6.5 million smartphones in 2020, as opposed to 7.2 million in 2019.
The LG Rollable smartphone may lead to significant improvements for LG’s smartphone business, but it is difficult to gauge its impacts just yet as it won’t be on the market for a few months. Recently, LG has been developing new smartphone projects in an effort to improve their smartphone product offerings.
Amid all the speculation, LG’s spokesman, Ken Hong, said that nothing is final and options for the company’s smartphone sector are still being discussed. We will just have to wait and see what LG’s next moves will be.
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