LG Is Considering Finally Leaving The Smartphone Business
LG may no longer be making phones for a long time. The company is considering shutting down its smartphone business, according to a new report from The Korea Herald. CEO Kwon Bong-seok sent a message to employees today advising that the company’s smartphone plans will fundamentally change.
While LG has some die-hard fans, the move would make economic sense given the state of its smartphone lineup. According to the report, LG’s smartphone division has lost around $ 4.5 billion in the past five years.
“Regardless of a change in the direction of smartphone business operations, employment will remain so you don’t have to worry,” Kwon said in his message.
Another undisclosed LG official commented, “As competition in the global mobile device market continues to grow, it is time for LG to deliver cold judgment and make the best choice. The company is considering all possible measures, including selling, taking back, and downsizing its smartphone business. “
According to the report, around 60% of the employees in LG’s smartphone business will be transferred to other areas of the company. It’s unclear whether the remaining 40% will be withheld or released for a much smaller LG smartphone company. Given Kwon’s testimony, the former seems more likely.
LG’mobile gear has some big fans, but LG phones generally failed to live up to expectations. LG phones are rarely seen as the best option among their peers, and when they do, it is usually aimed at a niche audience, such as those who want support for accessories like the dual screen. The company has also lagged behind the competition in the development of its camera technology, which is an important part of most smartphone buyers these days.
Smartphone enthusiasts will point out LG’s inconsistent history of hardware bugs and software updates that lag far behind the competition. These things, combined with years of high-end phones that felt like incomplete products, have resulted in poor sales.
Kwon became LG’s CEO in January 2020 and pledged to get his smartphone business back on track by 2021. That didn’t actually happen, and while the LG Velvet has been the company’s most interesting phone in years, it still hasn’t really caught on, and users can buy an LG phone through something from Samsung or Google. In December, LG announced that it would be outsourcing the design and construction of some of its low-end phones to third-party manufacturers.
This doesn’t mean LG isn’t working on innovations that could transform the smartphone business. The company showed off its rollable display technology at CES 2021 – a technology originally scheduled to roll out in a real phone earlier this year. Even if a phone is released with the technology, it is likely not enough for a sales driver to change LG’s smartphone plans.