LG is one of the historical Android companies, present in Spain since the beginning of the mobile operating system. Since its inception, the company has risked and put all possible resources into innovation, but all the investment has not been the reward that the company expected.
More specifically, the mobile division has only recorded losses since 2015, which is why it has been in the crosshairs of the most skeptical in each new quarter that fails to improve its results. The possibility of leaving the mobile business has always been shuffled in rumors, but it seems that after the last few years it is closer to being a reality.
Kwon to coldly judge LG’s mobile division
LG’s mobile division is, by far, the one that is weighing down the company the most, as it is a division that has not seen benefits for more than five years. The rumor about the abandonment of said division has always been there, but after the latest statements by the head of the division, it seems the end of LG in mobile phones seems more real than ever.
In an interview for The Korea Herald, the manager acknowledged that“As competition in the global mobile device market is fiercer than ever, it is time for LG to think with a cool head and make the best choice. The company is considering all possible measures, including the sale, withdrawal or reduction of the mobile market.
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. Shrinking the smartphone business but continuing to operate (for example, focusing on key markets and the most profitable models) seems to be a solution that is also being valued, but betting less on a business in which you have been losing for years is not very flattering.
Faced with possible job losses for workers in the mobile division, Kwon assures that“Whatever happens to the direction of the smartphone business, employees will continue to keep their jobs, so in that sense there is nothing to worry about.”“Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,”
Not a positive trend
LG financial reports since 2014 | Data source: LG.
That LG is not achieving the expected results is something that does not take us by surprise. Despite the company’s efforts to stay fresh and innovative, the results are not keeping up. 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 also hoped to make the mobile division start to generate profits by 2021.
The results, despite being slightly better in 2020 than in the respective quarters of 2019, have not been much of a change from the pre-Kwon era. At the beginning of 2019, the CEO of LG Electronics explained that the main reason for not leaving the smartphone business was that the innovations of the smartphone market allowed his team to be prepared in other divisions such as automotive or the internet of the stuff.
Seen from this perspective, it is not so much a loss as an investment within the company team, although being so much money it is possible that they explore other ways of maintaining their strength in innovation without damaging the quarterly accounts.
The entry LG, on its mobile division: “It is time to judge coldly” appears first in The Free Android.