LG may be looking to leave the smartphone business due to five years of continuously diminishing device sales, according to a report by The Korea Herald.
The latest details indicate LG Electronics president and CEO Kwon Bong-Seok recently sent a note to employees of its mobile branch, ensuring their jobs would be secure regardless of what happens to the business. This backs up long-existing rumors that the brand might call it quits in terms of making smartphones.
An LG representative also told the publication the company is now ready to make a “cold judgment” about its smartphone division, amid ever stiffening competition. In the event LG does stop making smartphones, a good portion of its employees could be transferred to other parts of the conglomerate or sent to work with LG affiliates.
Many note it interesting that this news comes not long after LG was a stand out manufacturer at CES 2021, where it showcased its rollable smartphone displays. However, that does not negate the fact that its mobile business has not seen a profit since 2015.
LG Wing official 
LG Velvet
When Kwon took the helm of LG Electronics in 2020 the brand shifted gears away from flagship tier devices to less expective models with a focus on design and unique features. These devices include the LG Velvet and LG Wing. However, the CEO was unable to uphold his promise that the mobile brand would see a profit by 2021.
Many pundits are holding out hope that LG Mobile will be able to escape a gruesome fate, as rumors about its ending are long-standing but haven’t come to fruition. LG told The Verge there are no immediate plans to shutter the business and it is taking measures to avoid that route. Those may include increased outsourcing to cut costs on developing and manufacturing devices.
While still in a deficit, LG posted a 148.4 billion won operating loss in the third quarter of 2020, solid juxtaposition from the 206.5 billion won loss in the first quarter and 237.8 billion won loss in the second quarter. Of course, LG isn’t the old brand to have suffer sales losses amid the early pandemic. Many have also increased their marketing of less extensive devices with higher quality specs to bolster consumer interest.
The brand is set to announce its fourth-quarter 2020 earnings next week.
