LG is considering leaving the mobile market since its CEO seems to be fed up with losing money constantly.
“It’s time for cold decisions,” said LG CEO Kwon Bong-seok in an interview with The Korea Herald. The company has been losing money with its smartphone division for six years, and it seems that its managers are considering saying goodbye to this business.
The CEO spoke of the fierce competition in this market, and even made comments that raise a “sale, abandonment or reduction of the smartphone business.
LG couldn’t turn ‘amazing form factors’ to sales
Kwon took the reins of LG a year ago and then made a singular promise: that the company’s mobile division would be profitable by 2021. To achieve this, he said at the time, he would come up with “amazing form factors to surprise users.
The LG Velvet and the LG Wing are certainly surprising, and at CES they briefly showed their LG Rollable, the also unique mobile with a rollable screen. The first two are not supposed to be working in sales as the company expected, and that made the CEO raise this decisive consideration now.
The company couldn’t break the barriers and stayed at the bottom of the race
LG’s market share in this market does not seem to be increasing (it is only 1.7 percent according to StatCounter) and these niche devices do not help to strengthen this presence.
LG’s CEO has already begun to plan a different future for his division in December 2020. The company would delegate the production of its entry-level and mid-range cell phones to third parties and its internal division would devote all its efforts to high-end devices.
This new comment leaves the future of that whole strategy in doubt, and certainly after six years of losses in this business it seems logical to think that perhaps it would be better to retire in time.
The decisions that LG has made to revive this division are not working at the moment, and the difficult competition with Samsung in South Korea and with Chinese manufacturers seems to be too much for a company that, of course, has always tried new things.