LG Announces Pivot Away from Smartphones
February 20, 2021
LG isn’t just exiting the LCD screen market. They’re also leaving the smartphone industry behind as well.
According to the Korea Herald, LG Electronic’s CEO Kwon Bong-seok sent a memo to staff about a change in their smartphone operations that simultaneously assured them not to worry—that their jobs would be safe, regardless of any change. Some 60 percent of LG employees work in jobs related to LG smartphones.
LG has struggled with their smartphone faction recently. According to earnings reports, they’ve lost more than $4.5 billion in the last five years as the industry has become fiercer and more competitive. According to Counterpoint Research, the company reported a 12 percent loss in the fourth quarter 2020 compared to the previous year.
LG is far from out of business, however. LG Chairman and CEO Koo Kwang-mo, the fourth-generation leader of the South Korea conglomerate, has announced a new direction for the company, leaving behind refrigerators and washing machines to invest in a future of artificial intelligence solutions, robots and smart cars.
This announcement comes on the heels of an announcement of a $1 billion joint venture with Magna, the world’s largest auto parts supplier based in Canada. The venture involves creating an electric vehicle power train. The new project is one of several the company is taking to position itself as a leading manufacturer in vehicle components and solutions.