After years of repeated rumours and rumblings, the future of LG’s smartphone division has come under speculation again as LG CEO Kwon Bong-Seok reportedly sent a message to staff on Wednesday suggesting that there could be major changes coming soon.
After years of losses, while the possibility of LG exiting the phone business or selling off its smartphone division shouldn’t come as a big surprise, this recent news does feel somewhat abrupt coming less than a week after LG debuted a new rollable phone concept at CES 2021.
However, according to info from the Korea Herald, following Kwon’s message about potential “big changes,” another LG official also explained that “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.”
Thankfully, Kwon said that “Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,” with the Korea Herald reporting rumours that around 60% of staff would be moved or reassigned to other divisions with LG.
Recently, while LG has been able to cut losses stemming from its phone division by outsourcing production of lower cost devices to third-party manufacturers, LG’s mobile division still suffered from an operating loss of $US124.9 ($161) million in Q3 2020.
The way I see it, LG Mobile struggles come from a number of different avenues. The first is that for years, LG has tried to keep pace with its big Korean rival Samsung without having the same level of tech or sales needed to sustain and support high-end phone development. Furthermore, LG’s phones have long been saddled with lacklustre software and support, with efforts like its Software Upgrade Centre having very little effect or benefit to end users. This often meant new versions of Android would take months or sometimes years to get pushed out to devices.
And while I really like more experimental phones like the LG Wing, it often felt like LG spent more time throwing ideas at the wall than trying to build out a larger range of budget and mid-range devices to better compete with devices like Samsung’s more affordable Galaxy A-series phones, which have been some of the best-selling handsets globally over the past couple years.
In a lot of respects, if LG wants to salvage is smartphone business, it might make sense for LG to take a page out of Motorola and HMD/Nokia’s playbook by focusing on hardware and device design while switching over to a more stock version of Android instead of LG’s customised skin. This would potentially let LG continue working on developing devices like its rollable phone concept and releasing more mid-range devices, while leaving Google to handle more of the load when it comes to software and OS updates.
Either way, while it’s still a bit too soon to pour one out for LG’s mobile division, it’s clear some big changes are coming.