The fate of LG’s struggling smartphone business has apparently been sealed, with the South Korean company reportedly giving up on attempts to sell the division and, instead, preparing to announce that it is being closed entirely. Times have been tough for LG, with its attempts to innovate on mobile devices being constantly overshadowed by Samsung, Apple and others.
To be fair, these attempts do not always hit the nail on the head. LG’s iterative approach to its flagships struggled to gain attention in the face of rivals’ big-budget marketing, while its experiments with dual-screen phones seemed clumsy compared to competitor’s folding-screen devices. Although LG looks set to change all of this this year, with its first mobile phone as brought up at CES 2021 in January, the likelihood of this device actually making it into production looked increasingly dire.
Pointing out that there are regular rumors and leaks that LG was looking for a suitor for the mobile division. The conversation surrounding this process suggested that everything had been in vain, with leaks earlier this week promising that a final closure was underway. This is something that the sources say that the Korea Times seems almost certain now.
Having tried – and failed – to sell the smartphone business to Vitenam’s Vingroup and other allegedly interested buyers, the report says, LG Electronics will now be in the losing division all the time. The public announcement is expected to take place on April 5, when LG will hold a board meeting. LG officials declined to comment specifically on the leaks.
“All we can say is that all possibilities are open,” said the anonymous spokesman. “Although we cannot confirm this now, we will announce the specific direction of our mobile business.”
Although a disappointment for the persistent group of LG phone fans, it would undoubtedly be a sensible strategy, given the rest of LG’s business. Despite the ongoing pandemic, the company posted a record operating profit of $ 2.85 billion in 2020, an increase of more than 31 percent compared to the previous year. Sales in the fourth quarter of 2020 specifically increased 11 percent from the third quarter and almost 17 percent compared to the same period twelve months earlier.
LG credited sales of premium appliances and demand for OLED TVs, as well as vehicle components, for increased profits. In fact, when it comes to home appliances, LG’s fourth quarter of 2020 was the best quarter in the company’s history.
In contrast, LG cited “slow sales of premium smartphones in international markets”, along with a shortage of 4G LTE chipsets for disappointing performance on mobile devices. The outlook remained rather bleak for this division, contrary to LG’s relatively optimistic forecasts for the rest of its teams.