Bad, very bad news for the mobile telephony sector, and that is LG may be considering leaving the smartphone sector for economic reasons. As we can read in The Korea Herald, LG Electronics CEO Kwon Bong-Seok sent a memo to all staff informing that the company was considering making major changes to its smartphone division, and on the table is the possibility of quit the smartphone business.
It is not the first news regarding said memorandum, in fact a news item about it was published last week in TheElec, although this had to be removed after LG’s public relations team flatly denied such information. On this occasion, however, the technology company has recognized that the document is real and that, indeed, at this time the future of its smartphone division is not assured of its continuity.
The cause of this is, as we have already commented, economic. Whatever the reason, and despite the investment made in said division, today it is the only one that has a deficit within the company. “Since the competition in the global mobile device market is getting fiercer, it is time for LG to make a cold judgment and make the best decision.”, We can read that an LG spokesperson affirms in the Korean media,“the company is considering all possible measures, including the sale, recall and downsizing of the smartphone business«.
The bad numbers in LG’s smartphone division are nothing new, to the point that the accumulated loss of the last five years reaches 4.5 billion dollars, and the last 22 fiscal quarters of the company have always closed in negative. In addition, its market share is minority, there is no market in which it manages to sneak into the top positions and, what is more, in most sales analysis, theirs usually appear in the classic aggregate “Others”.
It is indisputable that, for one reason or another, LG has not managed to stand out in a sector as competitive as this is. However, and I have already commented on this on previous occasions, it is also hardly debatable that it is one of the most innovative companies, if not directly the most. Projects like the LG WING (which in my opinion is the best phone of 2020) or LG Project B, both integrated into its Explorer project, as well as the recently leaked roll-up smartphone, are a sample of the company’s efforts to innovate.
We will have to wait to find out what decision those responsible for the technology finally make, although unfortunately the closure of the division would be an understandable measure. However, I think LG’s contributions to innovation are very valuable, and without them the sector that is a bit lame.