During the CES 2021 conference in January this year, LG announced a highly innovative concept smartphone with a scrolling screen, LG Rollable. At that time, the Korean tech giant proved the phone will go on sale later this year. However, everything did not workout as planned by 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.
If you remember, LG Electronics was reportedly selling 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.
Reason For LG Electronics Selling 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.