LG may announce departure from the smartphone market next week

LG may announce departure from the smartphone market next week
LG may announce departure from the smartphone market next week

Rumors have been circulating for some time that LG Electronics Inc. (LG) is preparing to leave the smartphone market, reinforced by a recent article in the South Korean newspaper DongA Ilbo that states that negotiations to sell the operation to the Volkswagen Group (Germany) and Vingroup JSC (Vietnam) failed.

But according to an informant known as Tron, who has released reliable information about LG in the past, a decision is expected to be officially announced by the company as early as next Monday.

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In December 2020, LG’s smartphone division recorded its 22nd consecutive quarter of loss. In January of this year, a representative of the company told the Korea Herald newspaper that “as competition in the global market is becoming more fierce, it is time for LG to make a cold judgment and the best choice”.

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“The company is considering all possible measures, including selling, withdrawing or reducing the size of the smartphone business,” he added, according to the publication.

At the same time, the CEO of LG Electronics Inc., Kwon Bong-seok, reportedly said that “regardless of any change in the direction of the smartphone business operation, jobs will be maintained, so there is no need to worry.”

In the third quarter of 2020, LG Electronics Inc. sold 6.5 million smartphones, compared to 7.2 million in the same period in 2019, according to data from Counterpoint. According to StatCounter, its market share fell from 2% to 1.7% in the same period.

Tron says the 4,000 employees in LG’s smartphone division will be moved to other sectors of the company, which started manufacturing mobile phones in the late 1990s and smartphones in 2010.

The insider also speculates about the future of software updates for LG devices. Although the company indicated that it would continue with development even if it left the market, Tron believes that it is “unlikely” that this will happen, which would leave recently launched devices, such as the Wing, “orphaned”.

Source: TechRadar

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