This Year, LG Is Rumored To Want To Stop Making Smartphones

LG Electronic di CES 2021 (YouTube @LG)

JAKARTA - After losing losses for six consecutive years, with a value reaching 5 billion United States (US) dollars, LG's smartphone division is struggling hard enough to keep competing again in the smartphone market.

Now, according to a report from The Korean Herald, LG Electronics CEO Kwon Bong-Seo has sent an internal memo to all employees. In the memo, Kwon hinted at changes to the LG smartphone line.

"As competition for mobile devices in the global market is getting tougher, it is time for LG to make the right judgment and the best choice," the company wrote in the memo.

Apart from that, the company is also considering various possible things, including sales, (product) recalls and downsizing of its smartphone line.

Based on the confirmation obtained by The Verge, LG acknowledged and stated that the internal memo was an original document. It's just that, the company explains if it hasn't taken an official decision.

"LG Electronic management is committed to making the decisions needed to solve the challenges of the smartphone business by 2021,": said a spokesperson for LG to The Verge, Wednesday, January 20.

In the internal memo, Kwon also said that some employees - it is estimated that up to 60 percent, will get new assignments at other LG business lines. It remains unclear whether 40 percent of employees will remain on the much smaller cellular line or be relinquished.

It is most likely that LG will still retain some of the knowledge and innovation from the agency. Reflecting on Sony, which still maintains the cellular division despite the losses suffered in order to take advantage of its technology for various devices.

Rumors Refuted, Later Corrected

Earlier this month, rumors circulated by TheElec emerged - then deleted, regarding the company's plan to remove its smartphone line. At the time, LG deemed the report "utterly false and inappropriate," in a statement to Android Police a week ago.

After that, LG promised to have a 'wow factor' that could attract buyers, thus making the smartphone line profitable. LG has made similar steps repeatedly through the G7, V40, G8, and V50 series to compete directly with Samsung and Huawei.

However, these products are still not sufficient to direct market share in the direction the company desires. In fact, the latest LG phones, Velvet and Wing, also try to offer the 'wow factor'. And both of them also received less response from the public.