LG CEO Kwon Bong-seok will be considering a strategic exit from the smartphone market, the department mobile which has only brought losses to the South Korean giant. The news was first advanced by The Korea Herald.
In the past five years alone, LG Electronics has lost more than $ 4.5 billion, or about € 3.7 billion. These are huge losses that compel the boss to look for new strategies for the Android tablets and smartphones department.
LG considers leaving the smartphone market
After refuting this thesis on previous occasions, it is no surprise that we see this hypothesis gaining new expression. Although it has not been officially taken over by the manufacturer, and probably will not be in the near future, it is an understandable step.
The “The Korea Herald“is based on an internal circular, a communication from the company to its staff. Through this medium, the LG strongman reportedly said that “the time has come to make a serious, data-based decision“, here speaking about the future of the division responsible for the company’s smartphones.
Above we see the LG Wing, the Android smartphone that embodies the vision of the LG CEO in order to “surprise consumers “, goal set in early 2020. The intention was to revive the segment of phones and products for company consumption.
With big goals for 2021 and, above all, for 2021, the South Korean giant now seems to reverse the strategy when analyzing sales performance during the last year. The same LG had already shown signs of wanting to leave the market mobile.
Although attractive, the LG Wing did not leave the shelves, being a curiosity overshadowed by Samsung folding smartphones, also suffering from a dubious utility with the new rotating dual screen format.
In other words, being different does not mean being useful and consumers prefer established formulas that have been proven in the real world.
A complete withdrawal, or substantial reduction in the sector mobile
On the table will also be a possible substantial reduction in the smartphone department and its presence in the mobile device market. In any case, the CEO will have ensured that the staff would not see their jobs at risk, guaranteeing their continuity within the company.
Up to 60% of current workers in the smartphone segment can be relocated to new divisions and sectors within LG, as well as to companies under LG’s responsibility. The emphasis on maintaining jobs is one of the priorities.
Interestingly, news that points to a strategic withdrawal from the smartphone market comes just days after LG showed us the LG Rollabe, the smartphone with a scrollable screen. It was one of the highlights of CES 2021, with an experimental nature.
Over 5 years of losses could dictate the end of LG smartphones
According to Statcounter data, LG saw its market share drop to historic lows in December 2020 – about 1.7%. Miserable values for an extremely competitive market dominated by fellow countryman Samsung.
LG has been losing ground in the smartphone market for more than five years and, given the accumulation of losses in this sector, the thesis now advanced is perfectly plausible.
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