As reported by The Korea Times, LG has decided to pull out of the smartphone business in order to restructure internally. The company is sending these employees to other divisions in the company, as per the industry sources.
“LG has considered various options such as a sale, split sales, or pulling out of the smartphone business, but decided recently to pull out of the business,” The Korea Times quoted a source declaring as much.
In addition, the source claimed that the company will make an official announcement at its board meeting on Monday, April 5.
The rumor has been around since January when it was said that the company is looking to either sell, downsize, or shut down its money-losing mobile division. There has been mention of an imminent shutdown being on the cards in the past and a planned announcement for April 5.
This claim was made earlier this week by @FrontTron, adding that employees would be relocated to the home appliances division. According to the tweeter, it is quite unlikely for LG to continue rolling out software updates after it has shut down, but this is still uncertain, and we’ll need to wait for official word on this.
Moreover, a report from Korea last week said that sales discussions ended up in a stalemate, leading to the closure. The reason why LG might shut down its smartphone division is obvious — it hasn’t made a profit since 2014, and its global smartphone market share has declined significantly over the last two years.
LG declined to respond to the queries regarding the claims. The rumor mill will likely be spinning on Monday, whether LG has decided the closure or not.
As a result, the smartphone landscape would fall apart, which has already been shaken by Huawei’s sales drop in the US. Even though LG’s smartphone division isn’t profitable anymore, it is still among the top three players in North America and a top-five player in Latin America. In January, the company showcased a rollable smartphone at CES. Several days later, the company promised that the phone was “a real product” and will debut in 2021. If LG is exiting the mobile business, retailers and carriers worldwide will be contacted by many to fill the gap left by LG.