Facing stiff competition and heavy losses, LG has had a mixed track record in the phone business.
Despite recently premiering its new rollable phone tech and capturing its fair share of buzz at the 2021 Consumer Electronics Show, LG may be considering getting out of the smartphone game altogether, according to a Wednesday report by The Korea Herald. The tech giant is facing stiff competition from other manufacturers as it looks to balance a $4.5 billion loss over the past five years.
LG CEO Kwon Bong-seok reportedly sent a memo to employees Wednesday, notifying them that he was considering a range of options for the company's smartphone division, which might include a sale.
"Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry," Bong-seok reportedly said.
LG was in the mix among top Android players in the early days of the modern smartphone era, building upon its success in during the candy bar and flip phone period. But as larger conglomerates like Samsung and Huawei took more share and upstarts like OnePlus began luring hardcore enthusiasts, companies like LG were increasingly squeezed out, particularly in the market for top-tier phones where the iPhone and Galaxy S family has long dominated.
After years of experimenting with gimmicks like an option for modular parts or leather backing, LG's lineup of flagship phones over the last three years have largely been conservative, offering high-end specs and a nondescript look for a moderate price. That changed over the last few months with the dual-swiveling screen LG Wing, which launched in the fall, and the Rollable unveiled at CES. The buzz from these phones, however, haven't changed the reality that the business has faced significant financial headwinds over the last several years.
"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 told The Korea Herald. "The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business."
An LG spokesman confirmed the memo to CNET, noting that the company was exploring a variety of options. "Currently, nothing has been finalized and commenting further would only be speculation," said LG spokesman Ken Hong.