|Jo Seong-jin, vice chairman and CEO of LG Electronics, speaks during a press conference at the Consumer Electronics Show in Las Vegas, Thursday. / Courtesy of LG Electronics|
By Baek Byung-yeul
LAS VEGAS ― LG Electronics will retain its money-losing smartphone business as it plays an important role in the firm's internet of things (IoT) ecosystem, the company's CEO said Thursday.
"LG has a business portfolio that includes the automotive and home appliance sector, which are all related to smartphones, so we are not thinking about withdrawing from the smartphone business," said Jo Seong-jin, vice chairman and CEO of the firm, during a press conference at the Consumer Electronics Show (CES).
With the rise of connected devices, IoT technology has been increasingly utilized in many industry sectors and experts say smartphones play a key role to control the connected devices.
Jo added LG has been reorganizing its smartphone business and will be finished by 2020.
"We are in the second year of trying to reorganize our smartphone business. It will be continued to next year. This doesn't mean we will cut the number of employees. We are trying to build up trust with consumers and make changes with a new form factor," he said.
LG has struggled with its smartphone business. It only had a 1.9 percent share in the global smartphone market in the third quarter of 2018, according to data by Strategy Analytics.
Its mobile communication division, which operates the firm's smartphone business, has been losing money for years. The division, which logged a loss of 1.25 trillion won ($1.1 billion) in 2016 and 721 billion won in 2017, is expected to continue to run a deficit for 15 straight quarters as of the fourth quarter of 2018, according to brokerage firms.
Due to the sluggish phone business, the firm's estimated operating came to 75.3 billion won, the lowest since the fourth quarter of 2016.
Speaking of its weakened fourth quarter performance, Jo said the firm "spent too much on promotions for Black Friday and the Christmas holiday season."
|Jo Seong-jin, vice chairman and CEO of LG Electronics, takes a look at the firm's HomeBrew beer brewing machine at the Consumer Electronics Show in Las Vegas, Thursday. / Courtesy of LG Electronics|
LG has been expanding its robotics business, taking it as the firm's future growth engine. Jo said the business could near the break-even point within two years.
"We are pushing forward the robotics business in five categories: home living such as vacuums and educational purpose robots; public robots which can be used in public places such as airports; industrial robots; wearable exoskeleton robots for disabled people; and entertainment purposes.
"As the business is still in its early stages, it is too early to talk but the business is expected to reach the break-even point within two years," he said.
Jo added its lawn-mowing robot, which was unveiled in 2018, is almost ready to hit market. "We will launch the lawn-mowing robot within this year. We are testing the product at the Konjiam Golf Club and in the United States."
At the ongoing CES tech fair, LG wowed tech fans and industry officials with its rollable OLED TV, which has a fully flexible and thin display that can be rolled up and hidden away.
Jo said the Signature OLED TV R is probably be the most innovative product displayed at the fair.
I didn't have time to look around the fair as I had many business meetings. But people on the inside said nothing can compare to the rollable TV in terms of innovation."