After accumulating 23 lossy quarters, LG could close or sell its smartphone division. The CEO of the company has recognized internally that the time has come to act.
LG studies leaving the smartphone market: the division's losses are already unsustainable
South Korean giant LG could exit the smartphone market, according to local newspaper The Korea Herald. Kwon Bong-seok, CEO of the company, explained in an internal message that it was time for him to make a decision on a division that has posted losses for 23 consecutive quarters. Options that they are evaluating internally include a "sale, retirement or downsizing of the smartphone business."
"As competition in the global mobile device market is increasingly fierce, it is time for LG to make a cold judgment and make the best decision," explained the manager to employees. "Regardless of any change in the direction of the business operation of smartphones, employment will remain, so there is no need to worry."
LG's phone division has become a money hole for the company in recent years. The losses recorded in the last 23 quarters total approximately $ 4.5 billion. Furthermore, the global market share is miniscule compared to rival companies such as Apple, Samsung or Xiaomi.
LG shows no signs of improvement
The current CEO of LG assured when taking the reins of the company that he would do everything possible to reverse this situation. Since then, the company has dispensed with the G series, introduced the LG Velvet, and tried to surprise the market with the LG Wing, which incorporates a rotating screen.
These changes to the catalog, however, have not been enough. According to data compiled by Counterpoint Research, LG sold 6.5 million smartphones during the third quarter of 2020 - a step back from 11% over the previous year. The figure, in addition, is far from that registered by its compatriot Samsung, which managed to place almost 80 million smartphones in the same period.
During the past CES 2021, LG showed its first rolling smartphone, but did not delve into its technical characteristics. The continuity of this project, given the uncertainty that the telephony division is going through, is, for the moment, unknown, as is the continuity of other possible launches.