23 February 2021
LG is reportedly considering an exit from the aggressively growing smartphone market. This is coming from a report from the Korea Herald that cites a letter sent by CEO Kwon Bong-Seok to its staff this week.
Referring to the quotes provided in the report, it is apparent that LG might be restructuring its smartphone business. In the letter, Kwon says that there is going to be a major change in how the smartphone segment operates.
“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 letter reportedly even states, “the company is considering all possible measures, including the sale, withdrawal, and downsizing of the smartphone business.”
With scant information, we can’t predict or even guess what LG is planning internally. It is possible that LG might just take an exit from the smartphone business completely. Another possibility is it might not do a complete exit and rather shift its focus on devices with unique selling points. Take, for instance, the LG Rollable, the phone with a rollable display that the company showcased earlier this year at the CES event. It is unlikely that the company will bid adieu forever from the smartphone business, especially when it showcased such a highly ambitious project just a few days back.
In the letter, Kwon has also assured that the staff will retain, with no new hiring.
According to The Verge, LG has confirmed that the letter sent internally to the employees is indeed genuine. An LG spokesperson confirmed that while the internal memo is real, nothing is set in stone yet. “LG Electronics management is committed to making whatever decision is necessary to resolve its mobile business challenges in 2021.“ He further added, “as of today, nothing has been finalized.”
Previously, LG had denied all those reports and speculations that reported a possible exit from smartphones’ business. LG blatantly called them "completely false" and untrue. But now, it seems, LG has come to a decision. It is expected that LG will turn its focus to its Rollable phone segment and continue to attract consumers with some unique characteristics.
We will update you as soon as LG announces something regarding its smartphone business.