LG is considering getting out of the smartphone business amid declining shipments and $ 4.5 billion in accumulated losses over the past five years (through The Korea Herald).
/article-new/2021/01/lg-wing.jpeg?resize=560%2C315&ssl=1)
LG CEO Kwon Bong-Seok warned staff before the company revalued its presence in the smartphone industry:
As competition in the global mobile device market becomes more intense, it’s time for LG to make a cold judgment and be the best choice. The company is studying all possible measures, including the sale, withdrawal and downsizing of the smartphone business.
He added that regardless of any changes, the company will keep its current employees in the smartphone division and reassign them to other positions.
LG has seen rapid declines in smartphone shipments in recent years and it is now believed that the company has a market share of only two percent. LG has recorded significant financial deficits in its smartphone segment for 23 consecutive quarters, reaching a total loss of $ 4.5 billion.
When he took over as CEO in January 2020, Kwon pledged to turn the company’s smartphone business upside down. Therefore, the CEO’s latest comments seem to be an admission of the failure in the segment’s profitability.
At the same time, LG is reportedly finishing production of LCD screens for the iPhone The Elec. LG Display had previously tried to supply LCD for the second generation of the iPhone SE, but did not meet Apple’s requirements, which led to Japan Display and Sharp being selected as suppliers. The LG factory that previously manufactured the components will be reused to make car display panels.
Earlier this month, LG unveiled at CES one of the first smartphones to launch in the world, as the company has strived to explore unusual designs to attract customers. The future of this device and other LG smartphones, such as the LG Velvet and the LG Wing, are now very uncertain.