Rumors have persisted for a while now that LG would be shutting down its smartphone business. LG confirmed early in the year that it was considering shutting down the division as it lost money. Originally, they would sell off the smartphone division, but the latest rumors say that LG has decided to shut the division down entirely.
A report from The Korean Times States that " LG Electronics appears to have decided to pull out of its money-losing smartphone business and entered into a transition process to relocate its mobile communications employees to other business units."
The report also mentions that the LG smartphone division has been operating at a loss since 2015. LG negotiated to sell the division to various buyers, including Vingroup, a Vietnamese company, but that the deal fell through.
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According to The Korean Times, industry sources stated, " G 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," and that an announcement would be coming from LG April 5th.
LG, for its part, went with "no comment" but followed it up with, "All we can say is that every possibility is open. Although we cannot confirm that right now, we will announce the specific direction of our mobile communications business."
This past January, LG Electronics CEO Kwon Bong-Seok mentioned that LG was reviewing its mobile business's direction and keeping its options open. Many Industry experts expected LG to make a statement regarding its mobile business at its March 24 shareholder's meeting. However, CFO Bae Doo-young only towed the company line, reiterating that " all possibilities remain open."
Although LG's smartphone division has been losing money, it's been a huge player in the world of electronics overall and seen its stock value soar as its home appliances, TV's and growing EV business and vehicle components business has been in high demand.
LG leaving the smartphone market would send serious ripples throughout the industry as they've been one of the top smartphone makers in the North American market and the top five in Latin America. Retailers will be looking to sell off their remaining stock of LG phones and find a replacement product from other makers.