When LG considering all options for loss-making mobiles

January 1, 2021

LG said in a statement that 23 consecutive quarters of losses in its mobile phone business amounted to about 5 trillion won ($ 4.5 billion).

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“In the global market, competition in the field of mobile phones, including smartphones, has become more fierce,” LG said in the clearest sign that it might consider ending a struggling business.

Global market of mobile phones & smartphones.

“LG Electronics believes we have reached the point where we need to make the best decision about our mobile business, keeping in mind current and future competitiveness.” Although LG ranked third in the global smartphone market in the first quarter of 2013 by Strategy Analytics, LG was not even among the top seven in the third quarter of 2020 after losing its position to Chinese smartphone makers. , Research firm Counterpoint said.

LG mobile market value

Analysts said that if LG decides to end the mobile phone business, its market value could increase by an estimated 4 trillion won, as more than five years of accumulated losses and misallocation of resources have affected the valuation. Ending its mobile business could also help LG focus on expanding auto parts, as it recently launched a joint venture with auto supplier Magna International to manufacture electric vehicle components.

“The mobile (LG) business has done everything it can to keep costs down,” said Ko Ewe Young, an analyst at Hi Investment & Securities.

LG mobile bussiness cost down

“The company has now reached a point where it needs to increase sales by taking market share from Samsung Electronics Co Ltd and Apple Inc, but this is not seen as very feasible, which makes it difficult for the company to improve its losing stance.” Last month, LG said it was reorganizing its mobile division to increase the outsourcing of low-to-mid-range smartphones, which analysts said represented an effort to cut costs.

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