Assets Put up for Sale Fail to Attract Buyers
LG Electronics has reportedly decided to close its smartphone production plants and pull out of the smartphone business as it could not find buyers for its smartphone-related assets.
The company has put on hold plans to release new models for its entire smartphone lineup, including its strategic smartphone Rainbow which was slated to come out in the first half of 2021. The LG rollable phone, which drew much attention, is also unlikely to see the light of day. LG Electronics is planning to share its decision on the fate of the Mobile Communications (MC) Division with internal members in early April at the earliest.
LG Electronics has reportedly tried to sell all or part of its MC Division to Vietnam's Vinh Group and Volkswagen, which were initially mentioned as possible buyers, but failed to hammer out a deal. Although the company has put up for sale a production plant in Vietnam and smartphone patent rights, these assets failed to attract much attention.
As a result, LG Electronics has suspended the launch of its strategic smartphone Rainbow, which was scheduled to be unveiled in March. The Rainbow is a smartphone of the 'Universal Line' that follows the company’s flagship line V Series and is a sequel to the LG Velvet released in 2020.
A dominant view inside and outside of LG Electronics is that the LG rollable phone is very unlikely to hit the market. Although LG Electronics says the development of the rollable phone is in progress, chances are small that the company will actually take steps to commercialize it.
"LG Electronics’ smartphone business has a global market share of around 1 percent. It is difficult to find a buyer who is willing to pay a high price for a company which has such a small global market share," said an industry insider.
Attention is focusing on how LG Electronics will revamp itself after pulling out of the smartphone business. The company has thus far been unable to withdraw from the smartphone business, although cumulative losses from it amounted to five trillion won.