[사설] LG phone business reexamined, showing the reality of a battlefield without gunfire

“Now, the era has passed where we can roughly export and live in second or third place. In the era of the Fourth Industrial Revolution, where everything changes rapidly, bold decision-making that quickly throws away regrets is urgently needed. We need to focus on the areas where we can become global champions through selection and concentration.”

This is the sum of the reactions of experts to the fact that LG Electronics has fully reviewed the mobile phone business that has been going on for 26 years and has revealed its intention to sell or withdraw. On the 20th, President of LG Electronics Kwon Bong-seok said, “We have come to the point where we have to make the best choice by calmly judging the current and future competitiveness of the mobile business. We are carefully reviewing the direction of business operation with all possibilities open.” Revealed. It was a remark that considered the sale or withdrawal of the smartphone business. The market accepted LG Electronics’ withdrawal of the smartphone division as a fixed fact.

LG Electronics, along with Samsung Electronics, is one of the two largest companies that have raised Korea’s information technology (IT) industry as a top class. The competitiveness of the home appliance sector is the world’s strongest, and the mobile phone sector was also ranked third in the world. Until recently, various types of experiments such as the LG Wing, as well as the world’s largest IT exhibition held online on the 11th,’Consumer Electronics Show (CES) 2021′, aimed at a reversal by showing the image of the next-generation strategic smartphone’LG Rollable’.

Despite the corona 19 crisis last year, LG Electronics achieved record-high performance of 63 trillion 2638 billion won in sales and 3,1918 trillion won in operating profit. By revealing the news of the establishment of a joint venture with Magna, Canada, the world’s third-largest auto parts maker, the automotive electronics business was promoted as the next-generation food. However, the smartphone sector was deeply festered. It has been in the red for 23 consecutive quarters and the cumulative deficit reached 5 trillion won. The crisis of LG mobile phones began with the introduction of smartphones that began with the advent of the iPhone in 2007. Consumers who turned once turned away from LG phones.

LG Electronics’ restructuring of smartphone business has great implications for Korean companies and industries. It shows the cruel reality that even a global company that has been doing well can lead to irreversible results through a moment of inattention or wrong decision-making. Infinite global competition is getting more intense as the years go by. It is not difficult to find a global company that has failed to transform because it cannot read the times and is being forgotten in the market. Nokia did it, Sony did it. Samsung Electronics is also not free from such changes. Until 2014, Samsung boasted the number one smartphone in the Chinese market. But now it has been pushed back to 7th place. In the memory semiconductor sector, it still has the world’s No. 1 competitiveness, but experts say that there is not much time left. Although Chinese companies struggled and earned time amid the US-China conflict, Samcheok Dongja can predict that China will run again.

Like this, even though companies are struggling to wage war without gunshots, the perception of the government and politics is far from reality. Rather than creating an environment that can boost corporate morale and strengthen competitiveness, it is blaming all conflicts and ills, such as social polarization and youth unemployment, to companies and chaebols. It is as if a company is a hotbed of redemption, and it is busy to lock down companies and produce regulations.

Despite the appeals of the business community, the 3rd Corporate Regulation Act (Commercial Law, Fair Trade Law, and Financial Group Integrated Supervision Law) passed the National Assembly led by the ruling party. The Democratic Party also said it plans to deal with the’Corona 19 Profit Sharing System’ bill targeting semiconductor and IT-related large companies at an extraordinary National Assembly in February. It seems obvious that it will lead to a decrease in the competitiveness of companies going through an era of harsh turmoil and a decline in corporate activities.

I hope the government and politics will now look at the implications of LG Electronics’ decision to review the mobile phone business and take it as an opportunity to face the harsh reality of companies.