Why LG Might Stop Selling Phones & What It Means For The Industry
After pondering a potential sale earlier this year, LG Electronics might just shut down its entire smartphone division and possibly soon.
After much speculation, LG is reportedly undergoing serious discussions to shut down its smartphone business. The company had previously dabbled with a potential sale of the entire division earlier this year after suffering significant losses over the past five years. However, with potential deals falling apart at the seams, the South Korean company may just end up shuttering the division, rather than waiting for a potential buyer.
Outside of the smartphone industry, LG Electronics is currently thriving relatively better in other categories, including home appliances and television sets. Though the company previously enjoyed a respectable presence in the phone industry more than five years ago, LG's smartphones have plummeted down the sales rankings, falling behind American, Chinese, and even fellow South Korean rivals, with Apple, Samsung, Xiaomi, vivo, and OPPO all enjoying better sales these days. In recent years, the company has tried to keep afloat with more creative form factors, sometimes derived from its television branch, including rollable and extendable smartphones. However, the experiments don't appear to have been that successful, and especially since the company has already talked about selling the branch altogether.
As reported by South Korean outlet dongA, LG might shutter the division completely and refocus its efforts on other ventures. According to the outlet's unnamed source, previous plans for a sale (which involved potential buyer Volkswagen) have fallen through. Additionally, LG has also reportedly canceled the development of its previously announced models. Though the reports, both past and present, have all pointed to the same end for LG's smartphone business, the company itself has refused to confirm the news. If anything, the company's officials have previously stated that the division will continue operations for the foreseeable future. Of course, with falling smartphone sales, LG is likely to eventually address the situation head-on and the report even suggests a more definitive answer from LG might be provided to employees sometime in early April.
As mentioned, the company has recently subsisted on its quirkier smartphone experiments with its most recent notable offering being the LG Wing, a dual-screen smartphone that swivels on a hinge. By itself, the device is a good example of the ongoing push for dual-screen smartphones. Unfortunately, it appears to have failed to leave much of a lasting mark after its launch. Besides its more adventurous endeavors, LG's more traditional fare of devices have also failed to dent the sales of the current powerhouses within the smartphone industry. That said, will the market and consumers miss the company's experiments? Unfortunately, probably not.
LG is no longer the only company experimenting with smartphone form factors. Chinese rivals Xiaomi and OPPO have also been recently pushing for quirkier form factors, whether through patents or prototypes. Not to mention, the industry has already seen alternate and creative devices coming through from Samsung and others, including foldable and extendable smartphones. Even if LG exits the smartphone industry entirely, it is highly unlikely that anyone other than the most dedicated aficionado will miss the company. If an LG exit is coming, other rivals can and likely will easily fill the vacuum left behind by the South Korean company, allowing it to turn its attention to other industries.
Source: dongA