LG Electronics Shutting Down Its Smartphone Business


LG

At the CES 2021 conference in January this year, LG announced a highly sci-fi video showing LG’s first concept smartphone with a scrolling screen, LG Rollable. At that time, the manufacturer proved the phone will go on sale later this year. However, everything went not according to plans for LG. Recently, we have been regularly getting news and rumors that the company is going to sell its smartphone business unit due to continuous losses.

LG Rollable

If you remember, LG Electronics should sell its smartphone business unit to VinGroup. But the deal fell through because the required price was too high. And now, as Bloomberg reports, the manufacturer may close its smartphone business instead of the previously reported sale.

It turns out negotiations between LG and Volkswagen and Vingroup JSC in Vietnam on the possible sale of the smartphone business has failed. Also, LG has suspended its plans to launch all new smartphones in the first half of the year. In other words, because LG has not found a suitable buyer to take over its smartphone business, it had to shut it down.

Why Is LG Electronics Quitting Its Smartphone Business Unit?

Previously, LG Electronics CEO Kwon Bong-seok said that the company had considered all options for a loss-making business. He said, ‘Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business.’

We knew that the Vietnamese company Vingroup JSC has a strong interest in acquiring LG’s mobile business. The company covers a wide range of fields, such as hotels, tourism, real estate, construction, automobiles, and smartphones. Its market value exceeds US$10 billion.

On the other hand, LG’s smartphone business has suffered losses for 23 consecutive quarters since the second quarter of 2015. As of the fourth quarter of last year, the department’s accumulated losses reached 5 trillion won (approximately US$4.43 billion). So this could become a good deal.

In this regard, some users expressed regret that in the field of smartphones, LG once became the world’s third largest smartphone manufacturer, second only to Nokia and Samsung. However, it is a pity that the former ‘overlord’ is now rumored to close the smartphone business.

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2 Comments

  1. Amstelveen
    March 22, 2021

    They should just fire the team who comes up with such stupid ideas for mobile phones like LG rollable. Who in the right mind would buy that? Making something just for the sake of making something a bit different. Make a proper product and sell it for a proper price. The last years they were just trying to sell their phones for high price, with low specs. No real idea what to do, no real support. They could make a comeback but with propper steps taken.

  2. Freeje238
    March 22, 2021

    Low Grade!