LG, a South Korean electronics company, has reportedly announced plans to exit from the smartphone market. Currently, the company is considering various means, right from potential sale and downsizing, to gaining back its footprint in the competitive smartphone segment in the region as well as across the globe.
Furthermore, the electronics company announced plans to relocate 60% of its staff from the smartphone segment to other units within its affiliates. Despite its plans to retain the remaining 40% of the employees, it has not decided the units to which they will be transferred. However, they are expected to be retained so as to focus on developing a few other flagship models, should the company decide against a complete exit.
Sources familiar with the matter have reported that Kwon Bong-Seok, LG’s CEO, has informed all the employees through email about the upcoming shutdown of the smartphone segment due to huge losses. For the record, LG incurred losses of over $4.5 billion (Rs.32,856 crore) over the past 5 years.
LG has been facing fierce competition due to the rising expansion of its rivals such as Samsung in South Korea, alongside other new smartphone players such as Vivo, OPPO, OnePlus, and Xiaomi. With an aim to gain a competitive edge over other rivals in this market, the company, in 2020, launched 2 new handsets, i.e. dual-screen Velvet & flip LG Wing handsets.
The latest downsizing announcement of LG happened in line with the unveiling of its unique rollable display smartphone at the 2021 Consumer Electronics Show (CES), a virtual event. This new product comes with a resizable screen and other unique features. The company has revealed that it is the 2nd device under the Explorer project; however, did not share any further details about the new product. In this event, it also reported an operating loss in its mobile communications business for 22 consecutive quarters.