LG may be leaving the smartphone business in 2021

LG may be leaving the smartphone business in 2021

Last week, Korean publication The Elec published an article claiming that LG Electronics notified its employees that it was shutting down its smartphone business. That allegedly included halting development on the company’s rollable smartphone which they previously said will be launching later this year. However, LG’s Head of Global Corporate Communications, Ken Hong, told XDA that the rumor was “definitely untrue.” But it now appears that the rumor had some truth in it.

Yesterday, a plethora of Korean outlets reported that LG is mulling leaving the smartphone business. The Bell reported that LG is considering restructuring its business by withdrawing only its premium smartphone line, while New Daily reports that LG is considering selling off its smartphone business. Meanwhile, The Korea Herald reported that LG Electronics CEO Kwon Bong-seok sent out a memo internally hinting that major change may be coming to the smartphone business.

“Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,” he reportedly said. An unnamed LG official told The Korea Herald the following: “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,” the unnamed official explained. “The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”

LG later confirmed to The Verge that the cited memo is genuine but that nothing is set in stone yet. In a statement, LG told the publication that “management is committed to making whatever decision is necessary to resolve its mobile business challenges in 2021” but that “as of today, nothing has been finalized.” According to News Pim, the highest bidder for LG’s smartphone business is VinGroup, a Vietnamese company that has plans to enter the U.S. market. An acquisition of LG’s smartphone business would help them quickly enter the U.S., though it hasn’t been confirmed yet that LG will sell its smartphone business at all let alone to VinGroup.

It’s ultimately not surprising to hear that LG Electronics is considering selling its smartphone business. As pointed out The Korea Herald, LG’s smartphone business has posted deficits in the phone segment for the last 5 years and has posted operating losses for 23 consecutive quarters since Q2 2015. When Kwon Bong-seok became CEO of LG Electronics in early 2020, he vowed to make a turnaround in the smartphone business by 2021. To that end, LG has executed multiple new strategies to win back customers. It ditched its G series in favor of the Velvet, launched the Explorer Project to bring innovative concepts to life, and began outsourcing production of its budget phones to ODMs.

The loss of LG in the smartphone world would be a big blow to the industry. While its efforts haven’t been too successful, the smartphones it offered often met needs that weren’t being catered to by anyone else. For instance, the company’s emphasis on audio quality has made its smartphones stand out among audio enthusiasts—in fact, they’re one of the few remaining OEMs to offer headphone jacks in their premium products! They have also been at the forefront of a few trends in the industry. Notably, the company’s V40 was the first modern smartphone with a triple camera configuration consisting of a main, wide-angle, and telephoto lens, a setup that has appeared in numerous flagships since. While the phones’ software support and value-for-money were lacking, there’s no doubt that LG smartphones brought a lot to the table, so we’ll be disappointed when they’re gone. There’s a chance that the company turns things around, though, so we’ll be keeping an eye out on reports to see where the business is headed in 2021.

Featured image: the LG Wing

About author

Mishaal Rahman
Mishaal Rahman

I am the Editor-in-chief of XDA. In addition to breaking news on the Android OS and mobile devices, I manage all editorial and reviews content on the Portal. Tips/media inquiries: [email protected]