LG Electronics considering exiting smartphone business
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LG Electronics may exit the smartphone business after losing about 5 trillion won (US$4.5 billion) over the past five years. Its CEO Kwon Bong-seok on Wednesday sent out a message to staff that hinted there would be a major change in the operation of the smartphone segment.
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“Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,” he said.
“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,” an LG official explained. “The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
As of last year the smartphone business had posted operating losses for 23 consecutive quarters, since the second quarter of 2015.
In the third quarter of 2020, the operating loss stood at 148.4 billion won, narrowing from 206.5 billion won in the first quarter and 237.8 billion won in the second quarter.
In the third quarter of 2020, LG shipped out 6.5 million smartphones, down from 7.2 million in the same quarter of 2019, according to data from Counterpoint. The company held a 2 percent share in the market.
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