Eclipsed by Chinese Rivals, LG Ponders Smartphone Future

SEOUL—China’s increasingly dominant smartphone makers are forcing a once-formidable rival to rethink its future in handsets.

South Korea’s LG Electronics Co. , still one of the biggest phone sellers in the U.S., said Wednesday that the company is “leaving all possibilities open” for its beleaguered mobile division amid slumping sales.

In a memo to employees, LG Chief Executive Kwon Bong-seok noted the division “has been in the red for 23 consecutive quarters…It’s time to make the best choice by judging our current and future competitiveness calmly.”

He didn’t outline any options under consideration, or specify a timeline for a decision, but analysts say options for LG—once one of the world’s leading smartphone brands—could include selling off the unit or downsizing its business to key markets such as North America, Latin America and its home market in South Korea. An LG spokesman confirmed the memo but declined to comment further.

The company has long been asked questions about its long-term commitment to smartphones, though it has dismissed those doubts before.


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