LG might shutdown its smartphone business instead of selling it

According to a new report from South Korea, LG Electronics might shut down its smartphone business instead of selling it.

File photo: LG G7 ThinQ, the last LG smartphone launched in the Philippines

Reportedly, negotiations to sell its smartphone business with ith Germany's Volkswagen AG and Vietnam's Vingroup JSC have failed

The source close to the matter noted that the negotiations with Germany's Volkswagen AG and Vietnam's Vingroup JSC have failed. LG currently has 1 percent of the global market, so it is difficult to find a buyer to buy the unit at a high price.

Basically, LG has not found a buyer for its smartphone business, a reason why it might close.

There are also reports that the brand might not launch any smartphone within the first half of the year. It added that the company may share its decision with the public and its employees as soon as early April.

If true, employment will still be maintained for its staff as promised by LG CEO Kwon Bong-seok in an earlier company message. An LG official further expanded on that by stating that the growing competition in the mobile market urged the company to consider all possible measures that include sale, withdrawal, and downsizing of the smartphone department.

According to rumors, 60 percent of the staff will be moved or reassigned to other departments within the company or its partners.

To recap, news back in January noted that LG is considering to leave the smartphone market after incurring over USD 4.5 billion of losses over the past 5 years.

The company already discontinued its G-series of smartphones in 2020 to pave way for the LG Velvet and Wing phones. But, it appears that those new lines still failed.

LG also teased a rollable smartphone earlier this year. However, we will have to wait and see if the company will still push through with that project.

LG was once one of the top smartphone manufacturers in the world behind Nokia and Samsung.

In 2019, LG has closed all its mobile phone stores in the Philippines even after denying that it'll exit the local mobile market.

Confirmed: LG is shutting down its mobile business unit, will focus on other growth sectors

Source: The DONG-A ILBO, Via: Bloomberg