LG to announce closure of the smartphone business on April 5

Now, LG Electronics is planning to shift its focus to the electronics department and the battery department.

Earlier in January this year, LG announced that it would be fully evaluating its smartphone business and then had considered a bunch of options, including selling the business. (AP)

LG Electronics has taken a call to not try and sell the mobile communication division of its smartphone business and have decided to withdraw from the business completely instead. People familiar with the matter have said that LG Electronics has recently confirmed a “complete closure” of the smartphone business unit and have begun converting employees from that division to the business unit.

Earlier in January this year, LG announced that it would be fully evaluating its smartphone business and then had considered a bunch of options, including selling the business. However, reports have it that negotiations with potential buyers were not successful.

Google, Facebook, Volkswagen and Vietnam's Bean Group were all companies LG Electronics was in talks with regarding the acquisition but none of them worked out.

There were discussions about the “possibility of converting to a 100% ODM (original design manufacturer) method while retaining the patents held by LG Electronics as the ‘Last Bastion'”. The company decided to refuse this possibility since for an LG phone it will be quite difficult to compete in the global market right now. 

So, while LG did try to sell the business it was difficult for them to reach an agreement with potential buyers regarding the issue of smartphone-related tech and thus the decision was made to exit the business entirely and the announcement is going to be made on April 5, according to sources.

BREAKING

LG Electronics' complete withdrawal of smartphones
Please refer article for details: https://t.co/pB6dZGovtT

Official statement is expected at April 5th, Monday, Korea time. https://t.co/ughOetJAvX

— 来自上海的Tron (@FrontTron) April 1, 2021

South Korea's Herald Business News has quoted industry sources on the condition of anonymity that LG Electronics will be announcing its decision to withdraw from the smartphone business when it meets its board of directors on April 5.

Now, LG Electronics is planning to shift its focus to the electronics department and the battery department.

LG's MC department currently has 4,000 employees and they are going to be transferred to the home appliance department next week following the announcement.

LG's smartphone business has been suffering losses since the second quarter of 2015 and has continued to do so for 23 consecutive quarters. It had accumulated up to 5 trillion won ($4.4 billion) as of the fourth quarter last year. According to CounterPoint, in the Q3 2020, LG's smartphone shipments were only 6.5 million units and its global share was only 2%. Also, LG smartphones actually withdrew from the Chinese market four years ago. All said and done, LG still hopes to retain the patents it has been granted already.