Report: LG Can’t Find Anyone to Buy Its Smartphone Business
LG has been trying to turn its mobile unit around for the last several years, but it has yet to pull out of the red. In early 2021, leaks suggested LG was looking to sell off its smartphone business. Now, a new South Korean report (spotted by Bloomberg) says LG has tried and failed to find a suitor, and the next step might just be to shut down the division entirely.
According to the always popular sources familiar with the matter, LG approached a number of companies about acquiring its smartphone operation. One such suitor was Volkswagen, which purchased batteries from LG until recently. The negotiations with VW were not smooth, and both companies eventually walked away, and the same was true of separate talks with Vietnam-based Vin Group.
In the wake of the failure to unlock its smartphone business, LG has reportedly delayed the unveiling of its next budget flagship phone, code-named Rainbow. The phone is believed to be a successor to last year’s LG Velvet, which took a step back from competing with the Galaxy S family. The Velvet had mid-range specs and a $700 price tag, something that should have positioned it well for the mess that was 2020. However, sales were still lackluster.
The report points to LG’s continued mobile losses and low market share for scuttling a potential sale. The company still has some presence in South Korea and the US, thanks largely to long-term carrier deals. However, its global market share is just 1 percent. No one is willing to take on a smartphone unit with so little strength when it’s also a money-losing machine. In 2020, LG reports that it lost a whopping $750 million making phones.
No one is going on record right now, but nothing about this report smells fishy — this is very much what we expected to happen. LG has been playing catch-up for years as Samsung has continued to grow alongside competitive Chinese companies like Oppo and Xiaomi. LG barely has a foothold in developed smartphone markets, but its prospects in emerging markets like India are non-existent. You can’t blame any firm for taking a look at the state of things and running the other way.
LG has been content to let the mobile group bleed quarter after quarter, using the company’s very successful appliance and home entertainment divisions to make up for that. However, its mobile business is moving in the wrong direction, and absent a last-minute sale, LG might just shut down the smartphone division. The report claims LG will shift some of its mobile resources to the automotive and battery departments. This could all be official as soon as next month, according to the report.