Update 5/4/2021: LG has confirmed that it will shut down its phone business for good to “focus resources in growth areas” like electric vehicle components, robotics and artificial intelligence. The company will continue to provide service support and software update for their phones for a period of time, and their current phone inventory will continue to be available for sale. Some phone models will still be available past 31 July 2021, the expected date of the shut down’s completion.
You might have to say farewell to LG phones soon as the company might shut down their phone business for good in the future.
Korean news site DongA reported on 21 March 2021 that the electronics company has been looking to shutter their phone business instead of selling it off. Additionally, the company has decided to put a few of their phones’ launches on hold including the “Rainbow,” a smartphone that was rumoured to be equipped with the Snapdragon 888 processor. LG also decided to indefinitely postpone the launch of the “LG Rollable,” a concept smartphone that the company debuted during CES 2021.
According to DongA’s Hong Seok-ho and Seo Dong-il, a business official familiar with the situation said that the company “is not concerned with the buyers and conditions of the smartphone business.” The unnamed source also mentioned that negotiations of the sale of LG’s phone business to Volkswagen and Vietnam’s Vingroup LSC have stalled. “… it is difficult to find a buyer who will buy at a high price,” an unnamed electronics industry official said to DongA.
This report is consistent with the Korea Herald’s report on 20 January 2021 about LG’s CEO, Kwon Bong-Seok, considering having the electronics company exit the smartphone business. “Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgement and the best choice,” Kwon Bong-Seok said. He also stressed that the employment of their workers will still be maintained in their company regardless of any change in direction.
Michelle Leff Mermelstein, LG’s head of US Public Relations, mentioned that LG is “exploring a variety of options in light of the headwinds facing [their] mobile business,” in an email statement to Corinne Reichert of CNET.
As for the future of LG Electronics itself, a business official that DongA reached out to stated that the biggest question after the removal of the phone business from the company is: what kind of business will LG Electronics create to fill in and take a leap forward in the global market?
Written by John Paul Joaquin