LG may finally be pulling the plug on its smartphone business after it failed to secure a buyer. The company had earlier in the year hinted at closing its mobile division before exploring a sale idea. LG has reportedly been in talks with two companies for a sales deal which seems to have hit a dead end.
The company is now said to be exploring the idea of shutting down the mobile division as opposed to finding other candidates.LG is reported to have held talks with Germany’s Volkswagen AG and Vietnam’s Vingroup JSC after LG Electronics CEO Kwon Bong-seok suggested the option in January.
Early this year, Bong-Seok sent out an internal memo to staff, hinting at changes in its phone business.
“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,” says an LG official in a statement. “The company is considering all possible measures, including the sale, withdrawal, and downsizing of the smartphone business.”
LG’s Smartphone business has reportedly lost the company about $4.5 billion in the last five years. The losses have been attributed to high competition in the Smartphone market with LG trailing after giant manufacturers, Samsung, Apple, Huawei among others.
LG later confirmed that the contents of the internal memo were true, but that no solid decisions had been arrived at yet “LG Electronics management is committed to making whatever decision is necessary to resolve its mobile business challenges in 2021,” says an LG spokesperson. “As of today, nothing has been finalized.”
It seems the company then chose to explore the idea of selling its smartphone business, which is now reported to have been unsuccessful. LG is also reported to have halted the development of its rollable phone which was slated for release in the first half of this year.
LG attempted multiple times to compete with Samsung and Huawei through their flagship phones G7, the V40, the G8, and the V50. However, despite promising “wow factors”, LG has not been able to impress users enough to clinch the smartphone market.
The company is now reportedly exploring its final options, with plans to share the decision with employees as soon as April.