“In relation to the mobile business, we believe that we have reached the point where we must make the best choice by calmly judging our current and future competitiveness.”
LG Electronics finally heard the’white flag’.
LG Electronics announced that LG Electronics is “opening all possibilities and examining” the mobile business of’Aemul Complex’, which has been in the red for 23 consecutive quarters since the second quarter of 2015 and has a cumulative loss of 5 trillion won. Drowned.
In some cases, even the rumors of the withdrawal of the project are being raised with weight. Apart from the existence of the smartphone business, the business contraction itself is an atmosphere that becomes a’fixed fact’.
LG Electronics announced on the 20th that, through a message from the management to internal employees, the MC (mobile communication) business division’s business direction was “opening all possibilities and carefully reviewing”.
What are the’possible futures’ that LG phones will face?
◇LG Rollable’s success or failure was a success or failure of’Premium Line’?
The most noticeable point for the LG smartphone business division-related work is the release of the’LG Rollable’, which was highly praised by people around the world with just 10 seconds of image release.
At the Consumer Electronics Show (CES) 2021 event held online on the evening of the 11th (Korean time), LG Electronics held a video press conference and revealed the appearance of LG Rollables before and after the conference.
Foreign media used adjectives such as “Wow! Gaze robbery” and expressed high expectations, saying, “LG, which constantly challenged the experimental smartphone form factor, paid off with a rollable phone.”
However, if LG Electronics drastically reduces its smartphone business, the launch of LG Rollable is likely to have an impact. It is expected that the’March launch’, which has been propelled predominantly in Korea, is unlikely.
Even at the time when LG Rollable was released, foreign media predicted that it would be difficult to implement a’rollable engine’ that rotates the screen inside the terminal, and it is expected to be released in the second half of this year or at the end of the year if it is late.
LG Electronics senior officials also <뉴스1>In a phone call with the department, “The rollable TV that was released earlier took more time than expected, such as commercializing it one year after it was released at CES. It is not easy to implement the rollable function.” Pointed out.
However, some drew a line saying “It is different from the facts” regarding the observation that the smartphone business has been reduced and the development of rollable phones has also been stopped. The official emphasized that “the development of the rollable phone is continuing,” and “(development of other premium phones) some of the developments have been suspended, but the development of the rollable phone is continued internally.”
The future of LG Electronics”premium terminal lineup’ is expected to change depending on the success or failure of’rollable phone’.
The development of the first rollable phone introduced at CES is ongoing internally, but it is known that the development of the’subsequent rollable model’ that started last year has been’paused’. It is expected to determine whether to continue developing follow-up models based on the market evaluation and sales trend of the rollable phone.
In addition, it is known that the subsequent development of the handset that formed premium lineups such as Velvet and Wing has stopped. It is not an exaggeration to say that there is no release of premium terminals other than rollables.
◇The low-priced phone business continues?… MC business, may move under HA
As LG Electronics has a strong position in the low-end handset lineup in Asian markets such as India, there are also some observations that low-cost models will maintain business.
This is the opposite of Huawei, which has recently decided to sell’Honour’, a low-end terminal lineup, and focus on’premium lineup’ under all-round pressure from the US.
In the case of Huawei, although it has sufficient funding power, it is faced with the problem of producing low-cost terminals due to difficulties in supply and demand of parts due to strong US sanctions. Therefore, while maintaining the premium lineup to maintain technological prowess, it sold low-cost lines that require mass production.
On the other hand, in the case of LG Electronics, it is difficult to maintain its premium lineup, which requires enormous R&D and labor costs, with a cumulative loss of 5 trillion won for 23 consecutive quarters.
In fact, the company reinforced its ODM division in the reorganization conducted at the end of last year. It is read with the will to continue producing low-cost terminals.
A senior LG Electronics official said, “We are reinforcing the ODM business to improve the deficit structure.” “ODM is a system designed and produced by the outsourcing company according to the product planning and giving it to the outsourcing company. “It can be more efficient.”
The official said, “The management is making various thoughts and strategies in order to normalize a company that has suffered a loss for 23 consecutive quarters,” he said. Repeatedly emphasized.
Among LG Electronics’ internal employees, 60% of employees in the mobile business unit’MC business unit’ will move to the home appliance business unit, HA business unit, and only 30% will remain in the MC business unit, and approximately 10% will retire. Rumors that it will be circulating are convincingly.
In the industry, it is predicted that the MC division is most likely to go under the HA division while being reduced.
It was written with the content provided through News1.