Will I be able to see’LG Rollable’… LG Electronics withdraws the mobile phone business after 26 years

[이데일리 장영은 김현아 기자] Is expected to cut down the smartphone business that has fallen into the’swamp of sluggishness’ and start withdrawal. With’LG Rollable’, an innovative device currently being prepared, the proportion of manufacturer development and production (ODM) is significantly increased without a strategic model.

If it is completely withdrawn this year, it means that it will withdraw from mobile phone manufacturing in 26 years. LG Group started manufacturing mobile phones under the brand’Hwatong’ during the period of LG Information and Communication in 1995, and the first smartphone released Optimus Q in 2010.

LG Electronics announced on the 20th that it will open all possibilities and review the direction of the smartphone business. (Photo = Yonhap News)

President Kwon Bong-seok promises to “keep employment” on the sale of the MC division

On the 20th, President Bong-Seok Kwon made an unusual position on the sale of LG Electronics Mobile Communication (MC), which was recently raised in various reports and blinds (anonymous bulletin board for online employees). He said that he was thinking about the direction of the smartphone business, leaving all possibilities open, including the idea of ​​the sale, but reaffirmed that a major change is inevitable by mentioning an operating loss of 5 trillion won.

First of all, President Kwon pointed out that despite the hard work of △improving product portfolio, adjusting global production sites, and launching innovative products, the MC division continued to lose for 23 consecutive quarters until the end of last year and was incurring an operating loss of 5 trillion won.

He said, “Competition in mobile business including smartphones is getting fiercer in the global market. We have reached the point where we must make the best choice by calmly judging our current and future competitiveness.” As the ambitious strategic products such as’Velvet’ released in the first half of last year and’Wing’ introduced in the second half of last year did not produce much results, it seems that internal concerns have deepened.

The fluctuations of employees are also severe, and among employees, rumors have emerged that a restructuring plan that contains a specific ratio of the number of retired, retired, and retired employees by division is going around, and that a major announcement will be made on the 26th.

This is also the reason President Kwon emphasized through an e-mail that day, “There is no need to be anxious because the employment of members is maintained.” As of the fourth quarter of 2020, 3,700 people are working in the MC division (including sales personnel).

[이데일리 이동훈 기자]

Velvet and Wing launched by LG Electronics as strategic phones in the first half and second half of last year. Although it received good reviews for design and innovation, it did not lead to actual sales.

LG Electronics, which has a busy way to go, seems to remove the burden of smartphone business

The rumor of LG Electronics’ withdrawal of smartphone business is a recurring issue every year at the beginning of the year, but this time it is different from the industry.

As President Kwon pointed out, competition in the global smartphone market is not fierce, and large companies at home and abroad are’all-in’ to new growth engines in the face of the 4th Industrial Revolution. The road to go is too busy to go sweet.

A telecommunications company official said, “It seems that LG Electronics is reviewing from various angles, including the withdrawal of the smartphone business,” and “It is difficult to withdraw immediately due to inventory issues, and a scenario is expected to reduce the business first, increase the proportion of ODM, and then proceed with the withdrawal procedure. I said.

According to the mobile communication industry, it is estimated that about 400,000 units of LG Electronics smartphone inventory are released in the domestic market alone. Considering the North American market, LG Electronics’ main market, it is impossible to immediately sell the business in the short to medium term.

Counterpoint Research, a market research firm, predicted that LG Electronics will increase the proportion of ODMs this year from 30% to more than 70%. Considering the direction of the recent organizational reorganization, the trend of maintaining and expanding the proportion of ODMs is expected to continue.

‘LG Rollable’ teaser video released at LG Electronics’ CES 2021. It was expected to be released as early as the first quarter of this year, but it became unclear. (Photo = LG Electronics)

LG Rollable is released as scheduled… Will it be the last strategy phone?

The LG Rollable, which LG Electronics unveiled at the world’s largest consumer electronics exhibition’CES 2021′ last week, is expected to be released as scheduled. A rollable phone is an innovative form factor (device type) that can be rolled up inside a device and then unfolded when needed.

It is known that it will be released in the first half of this year at the latest in the first quarter of this year, and CES also received praise as an innovative device that surpasses the foldable (folding) phone. However, it is expected to stop developing other strategic phones after the rollable phone.

As the rollable display and related technologies can be used for other products or services within the group, it is possible to consider the direction of distributing them to other divisions, leaving only development personnel.

An official from LG Electronics said, “At the moment, nothing has been decided, and it is in the process of reviewing.” “The development of the rollable phone is proceeding according to the schedule.”