(Cybertech) – LG could soon close or sell its smartphone arm, with reports claiming that huge losses are forcing drastic action.
It is said that the manufacturer has lost almost 5 trillion won (£3.32 billion) in the last five years, with its smartphone sales far from setting the world alight – especially in comparison with direct rivals, like Samsung.
LG’s CEO, Kwon Bong-seok, today told staff that its smartphone business could experience major change, while assuring them their jobs will be safe: “Regardless of any change in the direction of the smartphone business operation, the employment will be maintained, so there is no need to worry,” he said in a message, according to the Korea Herald.
His comments were clarified by an unnamed LG official: “Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.”
There have been rumours before that LG could licence its brand as an OEM, for a third-party manufacturer to make and sell LG phones. However, it seems several options are still on the table.
We have contacted LG ourselves for further comment and will update when we hear more.
Writing by Rik Henderson.