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LG Electronics says all options open for troubled mobile phone business

Reuters Seoul | Updated on January 20, 2021

People walk past a company logo of LG Electronics   -  REUTERS

South Korea company’s business had generated losses for 23 consecutive quarters

South Korea’s LG Electronics Incsaid on Wednesday it needed to decide what to dowith its loss-making mobile business and was considering all options.

The business had generated losses for 23 consecutive quarters amounting to about 5 trillion won ($4.5 billion) amid “fierce” competition, the company said in a statement.

LG Electronics shares leapt as much as 12 per cent versus the broader market KOSPI’s 0.7 per cent rise as of 0628 GMT following the statement.“The competition in the mobile business including smartphones has gotten fiercer in the global market,” LG said in the clearest sign yet that it could be considering a sale of the troubled unit.

“LG Electronics believes that it has reached the point where we need to make the best decision about our mobile phone business, considering current future competitiveness.”

Chief Executive Officer Brian Kwon said the company planned to retain employees regardless of what happened to the mobile unit.

Last month, LG Electronics said it had reorganised its mobile phone division to increase outsourcing of its low to mid-end smartphones, which analysts said represented an attempt to cut costs and compete with Chinese rivals.

Published on January 20, 2021

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