Reports are circulating that LG, once a top four global smartphone vendor, may exit the market, where it has been losing revenues and market share in recent years. The sector has become increasingly concentrated in the hands of Samsung, Apple and Huawei, as well as low cost providers in China and India.
In a letter to staff, CEO Kwon Bong-seok warned of a “change in the direction of the smartphone business operation”, where LG has reportedly lost about KRW5 trillion ($4.5bn) over the past five years. In the third quarter of 2020, it shipped just 6.5m phones, compared to 7.2m in the year-ago quarter, and the unit has posted losses for 23 consecutive quarters.
An official company letter later added more detail to the CEO’s comment, saying: “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 company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”