LG is considering leaving the smartphone market, according to a letter sent by CEO Kwon Bong-seok to employees, as first reported by The Korea Herald. An LG spokesperson said that competition in the smartphone market is increasingly fierce, forcing LG to "make a cold judgment and the best choice". The Korean company is exploring all options, including the sale, downsizing, or outright termination of its mobile business.
LG's mobile division has continuously posted a loss in every single quarter since the second quarter of 2015 - that's 23 quarters in a row - and LG Electronics has essentially been sustained by other divisions that turn a profit. Little by little, the company has shifted its strategy when it comes to smartphones, and LG's biggest phones in 2020 didn't even pack a flagship chipset from Qualcomm or MediaTek. Phones like the Velvet and Wing both used the Snapdragon 765 chipset instead and tried to stand out thanks to unique designs or new concepts, which was part of its strategy to make the business profitable by 2021.
Towards the end of last year, a report suggested that LG was looking to outsource the design and manufacturing of more of its low-end and mid-range smartphones, hoping to reduce costs and focus its efforts on more premium products. At this year's CES, LG teased a rollable phone, which the company said would be coming later this year, but that appears to be up in the air now.
Reports that LG might be exiting the smartphone business floated around last week, but the company denied those rumors soon after. It could be some time until we know for sure what route the Korean brand will take.