LG Electronics Might Exit the Smartphone Market in 2021
In an internal memo to employees, CEO Kwon Bong-Seok hinted that the company might exit the mobile phone manufacturing market after losing around $4.5 billion over the past five years. The tech giant is now thinking about whether to continue running the money-losing smartphone business or not as it struggles to compete with other smartphone manufacturers such as , , and .
LG Electronics believes that the moment has come when the company needs to make the decision regarding the mobile division, given the level of stiff competition now and in the future. The company “is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.” However, no final decision has been made yet, except for an internal memo sent to staff, hinting at possible changes for the phone business in the future.
To boost sales of premium smartphones last year, the company launched the Explorer Project, which includes a new category of mobile devices with an unusual form factor and an improved mobile interface, as well as the Wing smartphone with two screens and a rotating form factor. Unfortunately, they have not become successful among customers. LG also plans to launch a smartphone with a rollable OLED display later this year.
Rumors that LG might get rid of the smartphone business have been around for a long time. It was reported that the company might sell its mobile division. At the same time, LG Electronics stressed that the employees of their mobile unit do not need to worry, since the jobs will be safe regardless of any change in the way of the smartphone business operation. It may be possible that 60% of the staff will be reassigned to LG’s affiliates or other business units.