Last year, LG decided to have a last attempt with its smartphone division that resulted in the launch of the LG Velvet. The device came in a batch of confusing variants, but unfortunately, it was not enough to revive the smartphone bleeding business. The company also tried to innovate with the LG Wing, but despite its appeal as an unconventional device, it failed to be something that customers will desperately buy. Earlier this year, the company showcased its LG Rollable at CES 2021, and we thought that device would be the way for the company to revitalize its business. However, it was too late for saving the mobile business. Earlier this month, LG announced that it is exiting the smartphone business after several years in the red.
Interestingly, in a business perspective, that was the best solution for the company. According to the company’s latest report, all other branches have posted a yearly increase in sales. The other branches are bringing the total revenue to KRW18.8 trillion. This is the most LG has ever recorded between January and March. As we can see, the company’s mobile business was really decreasing the company’s revenue.
LG Home Entertainment Division is the big winner of Q1 2021
Worth noting that the Home Entertainment division was the biggest grower in terms of revenue. This is a direct result of the pandemic that had more people staying at home and looking for entertainment to kill boredom. The division experienced a recovering demand in North America and Europe traditionally profitable markets where LG managed to expand its sales of OLED and NanoCell TVs. The upward trend might continue and will go around premium products.
Interestingly, LG Mobile managed to sell phones KRW998.7 billion during the first quarter of 2021. This is the same as Q1 2020 down the decimal point. The reason is due to the new model releases and actions aiming at existing models. The Korean firm will be redeploying all personnel within the corporation. The company fills liquidation of assets, compensates partners and suppliers of service support, and so on.
Worth noting that all sales activities of the Mobile Communications division will be terminated at the end of July. That when the Q2 report will be published with the final numbers for LG Mobile. We will be able to see the direct effects caused by the company’s exit from the smartphone business. LG will then focus on other segments such as the Electronics and Display division.