President Kwon Bong-seok issued an official statement
Strengthening the sale of the MC business
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LG Electronics (066570)The smart phone (MC) division, which has recorded a deficit for 23 consecutive quarters, is reorganized. Ku Kwang-mo plans to reorganize its business centering on future businesses such as artificial intelligence (AI) and robots. LG(003550) The chairman’s strategic decision ended the’selling theory’ that had been repeated over the years. However, the manpower of the MC division is maintained as it is.
On the 20th, LG Electronics announced plans to sell its MC division, which produces and sells smartphones. The target of the acquisition or the exact size of the transaction is unknown. President Bong-Seok Kwon said, “No matter how the MC division’s business operation direction is determined, in principle, the employment of employees will be maintained, so there is no need to be anxious.” LG Electronics admitted to the sale by taking a different position from the beginning of the year, which had been denied as’no facts’, even though it was “plans to share it transparently and promptly to members when the direction of business operation is decided.”
Previously, in order to improve the business structure of the MC business division, LG Electronics has made great efforts in recent years to improve the efficiency of resource operation, adjust global production sites, and launch innovative products in recent years. Representative examples include relocating the premium smartphone factory in Pyeongtaek, Gyeonggi Province to Haiphong, Vietnam (in 2019), or expanding the smartphone order development manufacturing method (ODM) to reduce production costs (in 2020). However, since the second quarter of 2015, the MC business division has maintained an operating loss for 23 consecutive quarters, and the cumulative operating loss until the end of last year is 5 trillion won.
In related industries, the global spread of the novel coronavirus infection (Corona 19) caused a sharp decline in smartphone sales in major markets such as the United States and Europe. I see it.
Earlier, LG Electronics raised expectations by showing prominence in the feature phone market such as chocolate phones until the early 2010s. However, it is a practical example because it has not been able to keep up with the trend of the times in the mobile market in time. LG Electronics, which released its first smartphone late in July 2015, after Samsung Electronics and Apple settled in the smartphone market, did not come up with such a hit with the smartphone lineup. LG Electronics has been steadily releasing’G series’ and’V series’, and last year it released’Velvet Phone’ and’LG Wing’. At CES2021, the world’s largest home appliance IT exhibition, recently held,’LG Rollable’, which changes the screen size, was also unveiled.
/ Reporter Lee Su-min [email protected]
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