LG might shutter smartphone business as sale seems unlikely
What's the story
LG Electronics might be forced to shutter its smartphone business according to a report from a South Korean outlet Dong-A Ilbo. LG had been trying to sell off its loss-making mobile phone unit, but it can't seem to find buyers. The report also claims that LG has canceled its plans to launch new smartphones, which includes the futuristic rollable smartphone.
Shelved projects
LG rollable phone, V60 successor unlikely to launch
The cancellation of LG's rollable smartphone comes following a brief glimmer of hope after it was listed on Bluetooth SIG. However, another South Korean publication Chosun had already reported that LG's V60 successor codenamed Rainbow had been put on indefinite hold. LG, however, hasn't formally acknowledged the report, but that is understandable considering how the company is still trying to sell the business unit.
No buyers
Report comes after talks with Vingroup, Volkswagen failed
The report comes after LG's talks with multiple potential buyers for the smartphone arm fell through. It was initially in talks with Vietnamese electronics conglomerate Vingroup, but the deal fizzled because the offer was too low to be considered. LG also tried to pitch the smartphone unit to Germany's Volkswagen AG, but those discussions didn't lead anywhere either.
Domino effect
Faltering smartphone business also affects three OLED projects
It is also reported that LG could make a final decision on the loss-making unit next month. This is quite plausible since LG won't be keen on spending any more money on the business which has no plans to launch new products in the foreseeable future. The fallout of the faltering smartphone business also led to LG halting three OLED display projects.
Safety net
LG promised to relocate 60 percent workforce within the company
LG CEO Kwon Bong-seok had sent an internal memo to LG employees in January after initial reports emerged. The memo assured to relocate 60 percent of employees in the smartphone arm into other LG business units. With the sale of the smartphone business looking harder by the day, LG most likely will shut down the unit to rein in the mounting losses.