After six unprofitable years and spending $ 5 billion, LG has announced that it is ready to leave the smartphone market. CEO Kwon Bong Seok talked about the upcoming changes, as he put it – “It is time for LG to make a cool, balanced decision.”
Kwon Bong Seok took over the management of the company last year and promised that the smartphone division would be profitable next year. However, he did not specify exactly how he would achieve this. In 2020, LG launched two new smartphones – the Velvet with a dual-screen body and the wing with a flap screen, which have received many controversial reviews.
However, this did not change the situation with reducing the company’s market share which amounted to 1.7% by December 2020. At the same time, the administration announced the transfer of development and production of its low-cost phones to other ODM manufacturers (an ODM contract is a type of cooperation between two companies when one requests one Other company develop and manufacture some products – edited by Techcult).
Speaking to the employees, Kwon said 60% of them have been moved to other LG departments. The fate of 40 percent of the remaining individuals remains unknown. Perhaps some of them will remain in the state to retain valuable professionals.