To think of LG without its smartphone division seems illogical, but despite its attempts to improve, the problems are more evident every year. The South Korean company does not have a financially sustainable business in its handset division and is struggling to find a way out of the situation. To put it bluntly: LG wants to sell its mobile business and cannot find a buyer.
In fact, the latest talks held to completely divest its smartphone business were not positive either. Apparently, LG Electronics did not close a deal with either of the two companies that showed genuine interest: Vietnam’s Vingroup JSC and Volkswagen Group.
What was not publicly explained is why the negotiations failed. For starters, a business model with more than 20 consecutive quarters without profits is not very seductive. It is also real that the South Koreans will not want to divest a division without pocketing a tidy sum of money.
Earlier this year, LG’s CEO said that “all options were on the table” due to financial losses in the smartphone business. The latest reports even mention the possibility of shutting down the division altogether.
This would undoubtedly have a strong impact on the corporation’s global image, not to mention the labor aspect. A formal communication to the company’s employees is expected, but not before April.
The launches that were planned for the first half of 2021 would have been postponed indefinitely. This scenario would not be favorable even for the successor to the LG Velvet, whose development would also be frozen. It is also unclear what will happen to the rollable phone that could be seen on video earlier this year.
The same appeared in a clip from CES 2021 and its main feature allowed the display size to be adapted to the user’s needs. Despite the interest, there were rumors in February about discontinuation of its development, but LG publicly denied them.
What will happen to LG’s smartphone business? Will the company be willing to get rid of it for good or will a last-minute buyer appear? April would be the key month to find out if one of the world’s great technology companies finds a not-too-disorderly exit from the mobile market.