Leaked memo suggests LG is thinking about quitting the smartphone biz in 2021

'The employment will be maintained, so there is no need to worry,' says CEO


LG Electronics is reportedly considering leaving the smartphone business this year, according to a leaked internal memo issued by CEO Kwon Bong-seok.

Writing to staffers, Kwon said the future of LG's mobile business remained uncertain, but promised any decision would not result in any redundancies. "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 said.

An LG representative subsequently told The Korea Herald it was examining all possible opportunities, including selling, downsizing, or dismantling its mobile business. "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," they said.

This is a reversal for Kwon, who had previously reiterated his commitment to LG's mobile business and promised a return to profitability in 2021 following 14 consecutive loss-making quarters. At 2020's CES event, the company chief said LG's revival would be driven by phones with "wow factors to woo consumers".

Fate had different plans. Two months after Kwon promised LG's revival, the world was under lockdown to prevent the spread of the COVID-19 pandemic. Mobile sales cratered. Supply chains experienced unprecedented disruption. The entire phone industry suffered.

LG managed to release one "wow-factor" phone last year, the dual-screen LG Wing 5G in October - a cheaper alternative to rival foldable phones. Flicking the phone's corner would prompt the primary display to rotate into a landscape orientation, while exposing a secondary screen for other apps.

This handset, although gimmicky and lacking third-party app support, was generally well received by reviewers. Sadly, one phone cannot reverse several years of straight decline, which has no doubt been exacerbated by the rise of China's Xiaomi and BBK Electronics.

LG was one of the earliest Android adopters, wading into the sphere in late 2009 with the snappily named LG-GW620, while simultaneously hedging its bets with a smattering of Windows Phone devices. It was a different time, and Google's long-term success was no sure thing.

LG has had some resounding hits, partnering with Google on three of its Nexus devices (the 4, 5 and 5X). But its blunders have proved much more memorable. Some phones were simply too experimental for mainstream audiences, like the modular LG G5.

Quality control issues didn't help either. A manufacturing defect in some LG phones sold between 2015 and 2016 would result in the devices entering an inescapable bootloop. A software fix cured some phones, but others had to be recalled, wounding LG's public image and prompting class-action litigation. ®


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