Is LG Killing its Smartphone Business?
LG Electronics has indicated that it might finally shut down its smartphone business after years of losses and being unable to make a dent in the highly competitive world of mobile phones.
In a report on Nikkei Asia, LG CEO Brian Kwon said the company is “open” to all options for its mobile business in a memo to employees last week.
"LG Electronics believes we have reached the point where we need to make the best decision about our mobile phone business, considering current and future competitiveness," Kwon said. "We are reviewing directions of the mobile communication division, opening the door for all options."
Investors welcomed the news, resulting in a 25 percent spike in the company’s shares in the days following the announcement. Analysts believe the move will help LG become more competitive in other areas, including home appliances and automotive parts.
LG has posted more than $4 billion (P42 billion) in losses in its smartphone business over the last four years, according to Nikkei Asia. Kwon said the company has suffered 23 consecutive loss-making quarters.
At one point in the late 2000s, LG was one of the world’s top three mobile phone makers, along with Samsung and Nokia. The last time LG made a significant splash in the sales of its mobile phone was in 2014, when its G3 sold over 10 million units. Since then it has been unable to keep pace with brands like Samsung, Apple, and Huawei.
LG's share in the global smartphone market was less than two percent as of the third quarter of 2020. Samsung led the pack at 22 percent, followed by Huawei at 14 percent and, Apple at 11 percent.
Earlier this month, however, LG teased a rollable phone during the Consumer Electronics Show 2021.
Watch the teaser here:
Tech watchers say we might not even see that phone rolled-out to the market. We’ll just have to wait and see.