LG is considering exiting the smartphone business entirely amid diminishing shipments and accrued losses of $ 4.5 billion over the past five years (via The Korea Herald).
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LG CEO Kwon Bong-Seok warned staff earlier today that the company is re-evaluating its presence in the smartphone industry:
As competition in the global market for mobile devices intensifies, it is time for LG to make a cold judgment and make the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.
He added that regardless of any change, the company will keep its current smartphone division employees and reassign them elsewhere.
LG has seen a rapid decline in smartphone shipments in recent years, and the company is now said to have a market share of just two percent. LG has posted large financial deficits in its smartphone segment for 23 consecutive quarters, with a total loss of $ 4.5 billion.
When Kwon took office as CEO in January 2020, he pledged to change the company’s smartphone business. The CEO’s latest comments therefore appear to be an acknowledgment that the segment has not been made profitable.
At the same time, LG is reported to be discontinuing the production of LCD screens for the iPhone The Elec. LG Display had previously tried to supply LCDs for the second-generation iPhone SE, but failed to meet Apple’s requirements, prompting Japan Display and Sharp to be selected as suppliers. LG’s factory that previously produced the components will be used to produce automotive display panels.
Earlier this month, LG unveiled one of the world’s first rollable smartphones at CES as the company tried to discover unusual designs to entice customers. The future of this device and other LG smartphones such as the LG Velvet and LG Wing are now highly uncertain.