LG puts Brian Kwon, head of its hugely profitable home entertainment business, in charge of its struggling smartphone division
Mission impossible: a new executive at LG is charged with fixing the company's long-time loss-making smartphone division following a leadership change.
Context & Ripple Effects
This 2018 appointment reads differently in hindsight than it did at the time. LG had already shown its pattern of promoting executives out of profitable hardware divisions — it made appliances chief Jo Seong-jin CEO back in December 2016 — and handing Brian Kwon the mobile division extended that playbook to its most troubled unit.
The turnaround never materialized: a year later Kwon replaced Jo Seong-jin as CEO outright amid the division's 18th consecutive quarterly loss, LG then outsourced its low- and mid-range phones after 22 losing quarters, and in April 2021 the company terminated the smartphone business entirely.
First-order effects
- Brian Kwon leaves the hugely profitable home entertainment business to take direct ownership of a division that has been losing money for years — his entertainment track record becomes the benchmark against which any mobile recovery is judged.
- The smartphone division gets a leader with no mobile background, signaling that LG's board values proven P&L management over handset-industry experience.
Second-order effects
- LG's leadership pipeline now routes through its profitable divisions rather than mobile: both Jo Seong-jin (appliances) and Kwon (home entertainment) were elevated from businesses that fund the group, further marginalizing the phone unit's internal standing.
- A leader imported from a cash-generating division raises the opportunity cost of every quarter the phone business stays red, sharpening the case for structural options like outsourcing or exit over incremental fixes.
Third-order effects
- The sequence that followed — Kwon's promotion to CEO, the outsourcing of low- and mid-range handsets, then full termination — shows how conglomerates manage chronically subscale hardware units: install a trusted operator, shrink scope, and exit when scale disadvantages persist.
- For diversified electronics makers, sustained smartphone losses against larger-scale rivals increasingly end not in turnaround but in managed withdrawal, with leadership changes serving as the visible first step of that arc.
The trend: LG's smartphone unit moved from turnaround assignment under an outside-the-division executive to managed exit, a template for how diversified hardware conglomerates wind down subscale phone businesses.