LG is considering the discontinuation of its smartphone business following years of unprofitability, according to a report by the Korea Herald.
The company’s smartphone division has lost around $3.5 billion over the past five years, and CEO Kwon Bong-Seok has notified staff of a potential major change in the smartphone business this year.
In an internal memo, Bong-Seok said the sale, withdrawal, or downsizing of LG’s smartphone business was being considered.
However, he assured staff that their employment would be unaffected.
“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,” LG told the Korea Herald.
“The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
LG confirmed that it was considering ways to resolve the problems with its smartphone business in a separate statement to The Verge.
“LG Electronics management is committed to making whatever decision is necessary to resolve its mobile business challenges in 2021,” an LG spokesperson told the publication.
“As of today, nothing has been finalized.”
LG currently holds a 2% share in the global smartphone market, markedly smaller than its competitors Apple, Samsung, and Huawei, and its smartphone division has posted a loss for 23 consecutive quarters.
Unique smartphone designs
LG has tried many strategies to stand out from the competition, the most recent of which was its LG Wing swivelling smartphone, which comprised two displays that rotated between a standard smartphone form factor and a perpendicular T-shape.
This allows the user to expand a single application to both screens when or two applications can be displayed simultaneously – one on each display.
LG has also teased a new rollable smartphone device this year, and despite the re-evaluation of its smartphone business, it still plans to launch this handset this year.
The rollable smartphone has a “resizeable screen” which extends from the phone and functions as a small tablet display.
If launched, the LG rollable smartphone will be one of the most unconventional smartphone designs on the market.
However, it may also be the last smartphone the company produces, depending on when the smartphone division will be shut down.