The reasons why LG refuse to give up smartphone business even after 9th straight quarterly loss

LG Electronics' smartphone business is still in a slump.
The MC division, which is responsible for smartphones sale reported losses of just two hundred million won($180,000) in 1Q and expectations for recovery. However, it was reported that the deficit expanded to 10 billion won in 2Q.
LG Electronics' smartphone business deficit continues for the 9th quarter consecutively since the third quarter of 2015.

So some critics are saying that LG have to ditch their smartphone business.

However, from the perspective of LG Electronics, the smartphone business is a field that is indispensable for the complexization and smartization of household appliances.
LG consider smartphone is a business that can not be abandoned even if there is one who sees the deficit.

Kim Jong-ki, director at the Korea Institute for Industrial Economics & Trade’s ICT & emerging industry division, said, “Smartphones with new functions such as artificial intelligence technology and Internet of Things will create a new market in the fourth industrial revolution with the mobile network shifting from 4G to 5G.”
"smartphones are imperative for the future mobility era in terms of the smart home and Internet of Things,” he added.

The experts’ remarks are in line with LG Electronics’ CEO Jo Seong-jin, who also said at the latest consumer electronics show the company would not give up smartphones and would make a turnaround this year. The mobile communications unit is what will act as a point of cohesion for home appliances that are becoming more complex and smarter, he said.

LG recently launched smart home appliances controlled either by its Hub Robot or smartphones.

LG said, “We plan to continue to invest in the handset business because its communications technologies are deeply linked with other businesses such as smart home and vehicle components.”

Other experts pointed to smartphone’s symbolic significance as to why the tech firm continues with this business.

“It is not easy for LG to take the risk of ditching smartphones because the device is symbolic. Smartphones, unlike home appliances or vehicle components, are portable, meaning it is a very powerful tool to raise a brand’s profile among consumers,” said Yeo Joon-sang, a professor at Dongguk University’s business college.

The other reason why LG won't ditch smartphone is its synergy with the automotive electronics equipment business.
In the automobile industry, smart car technology is also progressing, which combines communication and AI, including autonomous driving and connected cars.
In light of this, given the synergies with the smart car business, which LG Electronics is developing as a future growth engine, LG can not give up smartphones either.
Services such as turning the car on and off, opening and locking the car are already commercialized on smart phones.