Earlier today (20th January 2021), LG Electronics made a statement regarding the potential future of the company’s Mobile Communications or smartphone business. The statement likely arrives to calm employees regarding the prior announcement that the company might be ending its mobile phone operations by the end of this month.
In the official email sent to the MC employees, Kwon Bong-seok, CEO of LG, assured that the employment of the workers will remain secure as a general rule, regardless of the direction the South Korean tech giant takes regarding its smartphone business. In other words, the senior executive aimed to ease the worries of the employees in the company’s smartphone unit, and assured them regarding their job security.
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For those unaware, the smartphone business of LG has suffered 23 consecutive quarters of loss, which started from the fourth quarter of 2015 till the fourth quarter of last year as well. Near the end of 2020, the company had launched the LG Wing, which was dual display handset, that sold less than what the brand had expected. Similarly, its low end to mid tier devices was also struggling in comparison to Chinese counterparts. LG believes that it has reached a point where it has to make a tough decision regarding the future of its mobile business.
At the moment, the company stated that it was open to all possibilities and is reviewing its handset arm. In other words, we can expect the company to either exit the smartphone market entirely or sell its business, with a representative stating that it might consider both. Notably, TheElec had previously reported on the company also shutting down its smartphone business entirely earlier this month, which we had covered. However, LG representatives had called this news false back then. So it remains to be seen what path the company takes regarding its smartphones.
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