Decision reportedly already made by LG management to stop selling smartphones, and pull out of mobile communication sector altogether
South Korean giant LG Electronics is reportedly soon to exit the smartphone sector altogether, after years of struggling to make an impact.
The Korea Times, citing three sources, reported that a decision has already been made about its loss-making smartphone division and it has entered into a transition process to relocate its mobile communications staff to other business units.
The media outlet reported that LG’s smartphone unit has suffered operating losses since 2015, and the firm had recently attempted to sell the mobile communications unit.
Indeed, the firm has reportedly been in negotiations with various interested buyers, including Vietnam’s Vingroup, but failed to reach an agreement with any of them.
It was reported that LG had considered selling parts of its operations or pulling out of the smartphone business altogether.
But it decided recently to pull out of the smartphone business altogether, the Korea Times reported.
“LG has considered various options such as a sale, split sales or pulling out of the smartphone business, but decided recently to pull out of the business,” the outlet quoted industry sources as saying.
The reported added that LG is expected to make an official announcement at its board meeting on Monday 5 April.
When asked to address such prospects, an LG Electronics official reportedly said, “There’s nothing to comment on.”
“All we can say is that every possibility is open,” the official reportedly said. “Although we cannot confirm that right now, we will announce the specific direction of our mobile communications business.”
The possibility of LG pulling out of the smartphone business surfaced in January when LG Electronics CEO Kwon Bong-seok reportedly acknowledged that the company was reviewing the direction of its mobile communications business with all possibilities open.
Although LG’s smartphone business has struggled, other divisions have enjoyed great success such as home appliances and TVs, thanks in part to lockdowns caused by the global Coronavirus pandemic.