LG Electronics is mulling on exiting the smartphone business, according to a report by The Korea Herald. It is said that the company’s phone market share had recorded a loss of 5 trillion won (~RM18 billion) over the past five years.
According to the report, CEO Kwon Bong-seok sent out a message to staff stating that it was “about time for LG to make a cold judgment” about its ailing mobile division. “The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business,” he added.
At the same time, Kwon assured employees saying, “regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry.” He also pointed out that LG is facing fierce competition in the global market for mobile devices, which resulted in the company’s consideration of viable steps to take.
The Korea Herald cited rumours where 60% of the mobile division’s staff will be moved and reassigned to other business units within the company or to other LG affiliates. The fate of the remaining 40% was not disclosed, but it is believed that the company will retain some of that institutional knowledge for its other products.
In 2020 alone, LG has introduced two new devices with the aim of innovating smartphone designs. These include the Velvet and the premium priced Wing (pictured on top) – the latter featuring an interesting yet bizarre dual screen approach. Despite the LG Wing making headlines thanks to its design, consumers still fixed their attention onto traditional yet familiar smartphones such as Apple iPhones and the Galaxy series from rival Samsung.
Also keep in mind that LG’s supposed plan of withdrawing from the smartphone industry is from unofficial sources, and may not be accurate in the end. At least until the company would actually admit this in the foreseeable future.
The company’s departure, should they decide to do so, will definitely leave a significant impact in the smartphone market. This would mainly benefit its competitors as existing LG users may turn to other brands for alternatives, especially once their devices lose software and hardware support after the exit. Fortunately, this wouldn’t be an issue for Malaysia as LG no longer sells their smartphones on local store shelves for several years now.