LG has started to consider exiting the smartphone market this year; the company has already faced a loss of around $4.5 billion over the past five years. For some time now, LG's smartphone business has been struggling, especially when competing with the rivals. LG CEO Kwon Bong-seok has issued a notice to the employees telling them that the company is considering making big changes to the smartphone business.
LG is Considering All Possible Measures Including Selling Their Smartphone Business
According to a report from The Korea Herald, the CEO sent out an internal memo to staff on Wednesday, and the memo hinted at the change in direction for LG's smartphone business. This is an excerpt from the memo.
Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.
There have been rumors that LG may be looking at downsizing or dismantling their mobile division for some time now. About 60 percent of the staff would be removed from the mobile division and placed within other units within the company or assigned to other LG affiliates.
This isn't the first time rumors of LG quitting the smartphone business has come up. Back in 2019, the company decided to expand the outsourcing of its low-end and mid-range smartphone production. They denied the rumors saying they were doing it because they wanted to increase the original development volume.
While companies like Samsung, Xiaomi, Apple are continuing to dominate the smartphone market even in 2021 and in the midst of a global pandemic, LG's reasoning for quitting the smartphone business is a lot more than that. Put, despite having great R&D at hand, the company has suffered creating some viable smartphones since, well, since the time of LG G4, and not just that, there have been multiple lawsuits surrounding those phones as well.
Although LG is doing excellent in other departments such as the television and appliances, the smartphone division is suffering.
If LG leaves the smartphone market, this will leave a piece of cake for other manufacturers, namely Samsung, to munch on, and we are not sure how big of an impact this will leave on the company. We will surely keep you posted as the story develops.