LG’s exit from smartphone business looks increasingly likely after buyers pull out
Will LG phones soon become a thing of the past? It’s starting to look increasingly likely. According to a recent report, the LG Electronics division has failed to secure a buyer for its mobile business, leaving it at risk of shuttering completely.
While LG continues to be a leader in televisions, monitors, and home appliances, the company has spent years watching its share of the smartphone market diminish. The 6.5 million devices it shipped in Q3 2020 marked a 7.2 million decline compared to the same quarter a year earlier, and the smartphone group has lost about 5 trillion won ($4.5 billion) across the last five years.
In January, LG’s CEO said the company was considering all possible measures regarding the smartphone business, including its sale, withdrawal, and downsizing.
According to a DongA Ilbo report (via Bloomberg), Germany’s Volkswagen AG and Vietnam’s Vingroup JSC were looking into acquiring LG’s smartphone arm, but negotiations have fallen through. As they were the only two interested parties, it leaves LG’s withdrawal from the phone industry a more likely prospect.
LG has already outsourced the manufacture of its low- to mid-range phones to Chinese firms, and the company is said to have stopped production of its rollable handset, despite its recent listing on Bluetooth SIG. Additionally, the planned first-half rollout of all its new smartphones has reportedly been shelved.
We’ve already heard that the successor to the LG Rainbow has been delayed indefinitely. The cessation of its smartphone operations would likely spell the end for its current Velvet, Wing, and the V60 ThinQ flagships, too.
LG may tell employees its decision regarding the smartphone businesses next month. It’s likely that affected workers will be relocated to other divisions within the firm.