LG is one of the historic Android companies, present in Europe since the beginning of the mobile operating system. Since its inception, the company has risked and put all possible resources into innovation, but not all investments have been the reward expected by the company.
Specifically, the mobile division has only recorded losses since 2015, which is why it is in the sights of the most skeptical with each new quarter that fails to improve its results. The possibility of leaving the mobile business has always been mixed in with the rumors, but it seems that after the last few years it is closer to reality.
Kwon will coldly judge LG’s mobile division
LG’s mobile division is by far the biggest drag on the company, as it’s a division that hasn’t seen any benefits for more than five years. The rumor of dropping out of this division has always been there, but after the latest statements from the head of the division, it seems that LG’s end in mobile phones seems more real than ever.
In an interview with The Korea Herald, the director admitted that“With competition in the global mobile device market fiercer than ever, it’s time for LG to think with a cool head and make the best choice. The company is considering all possible measures, including selling, withdrawing or shrinking the mobile market.
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This statement is not a confirmation about LG and it is not expected that in a few months we will see a complete withdrawal, but there are certainly two very drastic options on the table. Reducing smartphone business but keeping it running (e.g. focusing on key markets and the most profitable models) seems like a solution that is also valued, but relying less on a business that you have been losing in years n is not very flattering.
Faced with possible job losses for workers in the mobile division, Kwon ensures that“Whatever happens to the direction of the smartphone business, employees will continue to keep their jobs, so there is nothing to worry about in this regard.”“Regardless of any change in the direction of the smartphone business activity, employment will be maintained, so there is no need to worry,”
Not a positive trend
LG financial reports since 2014 | Data source: LG.
The fact that LG is not achieving the expected results is not something that does not surprise us. Despite the company’s efforts to stay fresh and innovative, the results fall short. Already at the end of 2018, when Kwon took over the reins of LG, we expected a complete reinvention of the mobile division and the company itself was also hoping to see the mobile division start generating profits by 2021.
The results, although they were slightly better in 2020 than in the respective quarters of 2019, have not changed much from the pre-Kwon era. In early 2019, the CEO of LG Electronics explained that the main reason for not leaving the smartphone business was that innovations in the smartphone market allowed his team to prepare in other divisions such as automotive or the internet of Things.
Seen from this point of view, it is not so much a loss as an investment in the company team, although since it is so much money it is possible that they are exploring for more. other means to maintain their strength in innovation without damaging the quarterly accounts.
The LG entry, on its mobile division: “It’s time to judge coldly” appears first in The Free Android.