Competition is a great thing for consumers, as it forces different companies to constantly raise its game to deliver better products and services. The problem for the different companies competing though is that it also makes for a more cutthroat environment. Those companies that aren’t able to keep up with the increasing standards of excellence, will inevitably lose out.
It appears that the competitive mobile phone market might be getting the better of LG, as The Korea Herald is reporting that the CEO Kwon Bong-Seok has sent out an internal memo to staff hinting that the company may be looking to exit the mobile phone market. In a follow-up statement to The Verge, LG says that this option is still being considered and that nothing has been finalised yet:
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.
LG has reportedly lost around $4.5 billion over the last five years from its smartphone business and so it makes sense that the company should perhaps cut its losses and focus on those aspects of the business that are actually bringing in a profit, like its exciting panel division.
LG has certainly tried a lot of unique and original ideas to win over more consumers in the smartphone market including its Wing Smartphone and plans to make a rollable device. With the likes of Samsung, Huawei, Xiaomi, and Apple proving to be more popular with consumers though, it’s been tough for them to make any headway into the market despite a few innovative ideas and it will be interesting to see where the company goes from here.
Hopefully, the company can find a solution that not only helps them become more profitable but also can save as many jobs as possible and perhaps sell off their smartphone division to one of their rivals who may be able to use their bigger brand power to make a success out of their unique ideas.
It’s sad to see another competitor possibly step out of the mobile phone game, but with the market continuing to grow and evolve with a bigger push towards value, times will become increasingly tougher for the small players. I wouldn’t be surprised if we see a few of the other smaller handset manufacturers also looking step away from the industry over the next few years.
Last Updated: January 22, 2021