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Monday, 22 March 2021

LG Considers Shutting Down Its Smartphone Business


LG Electronics notified its employees that it was shutting down its smartphone business, according to emerging reports.

In January, one of the highlights at CES 2021 Conference, LG Electronics Inc. proudly showed off the first concept phone with a rollable screen. At that time, it was called LG Rollable, and it looked promising. At that time, the company talked about how the phone would go on sale later this year.

However, it seems like things are not going according to plan. We have just got word that LG is in the process of shutting down the mobile communication business rather than selling it, DongA Ilbo reports, citing an unidentified person in the electronics industry.

The company is exiting the market because of continuous losses that the company has been facing for some time now.

Negotiations with Germany’s Volkswagen AG and Vietnam’s Vingroup JSC on possible sale of the smartphone business seemed to have failed, according to the report. LG Electronics’ CEO said in January that all options were on the table for the loss-making operation.

The company was said to have halted development last month of phones with a rollable display, and DongA said Sunday that LG has shelved a planned first-half rollout of all new smartphones. LG may share its decision on the business’ fate with employees as soon as early April, the DongA report said.

LG has talked about how they have struggled to make their smartphones a viable option in the market considering how tough the competition has become, especially from Samsung. However, at that time, the company was still looking at options to ensure that it can stay in the market.

Additionally, Vingroup JSC had a strong interest in acquiring LG’s mobile division, but it seems like that is also not working together. That, combined with the fact that LG’s smartphone business has suffered losses for 23 consecutive quarters since the second quarter of 2015, and as of the last quarter of 2020, the LG mobile division has accumulated losses that have reached 5 trillion won approximates to $4.43 billion.

LG was once the third-largest smartphone manufacturer, second only to Samsung and Nokia. However, it is sad to see LG going out of the market, considering how the company has made some of the best smartphones. The G4 remains one of my favorite smartphones of all time, and I was looking forward to what LG was planning on doing with the Rollable, but it seems like that is not going to happen.

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