The competition in the smartphone market is tough and LG brand appears to be the next to be hit by the wave of losses, after losing around $3.5 billion in the last 5 years.
According to the latest report, LG is considering opting out of its smartphone business following years of unprofitability and losses in the smartphone market.
The company’s smartphone division has lost around $3.5 billion over the past five years, and the CEO of the company has notified staff of a potentially major change in the smartphone business this year.
In an internal memo, Bong-Seok said the sale, withdrawal, or downsizing of LG’s smartphone business was being considered.
LG currently holds a 2% share in the global smartphone market, markedly smaller than its competitors Apple, Samsung, and Huawei, and its smartphone division has posted a loss for 23 consecutive quarters.
LG can’t even effectively compete with other brands in smaller countries, and in Africa despite the fact that it has tried out different strategies to stand out but always result in losses.
Not too long ago, the company unveiled LG Wing swiveling smartphone, but it doesn’t stop the company from running into losses.
However, LG assured its staff that their employment would be unaffected.
“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,” LG told the Korea Herald.
“The company is considering all possible measures, including the sale, withdrawal, and downsizing of the smartphone business.”
LG confirmed that it was considering ways to resolve the problems with its smartphone business in a separate statement to The Verge.
“LG Electronics management is committed to making whatever decision is necessary to resolve its mobile business challenges in 2021,” an LG spokesperson told the publication.
“As of today, nothing has been finalized.”
The company is also working on a rollable smartphone which may likely be its last smartphone before closing the smartphone chapter of its brand. If launched, it will be one of the most unconventional smartphone designs on the market.