LG Planning Exit Strategy From Mobile Business
The mobile phone industry is likely to lose one of the last major manufacturers of earlier times soon. Because there is no one who wants to continue LG’s smartphone division. The role model will therefore probably not even come onto the market.
A few weeks ago it became known that LG had started examining various options for the future of the business model. It was already clear at the time that the department could not be continued in the current framework. Because LG has not been able to keep up with the leading providers significantly for years and is posting massive losses in the mobile sector.
According to recent reports from South Korea, the LG management should not have succeeded in finding a possible investor. Talks are said to have taken place with the German automotive group Volkswagen, among others, but they did not come close to a positive result. Negotiations with the Vietnamese Vin Group have also failed. So everything now boils down to shutting down the entire area.
Tremendous losses
LG was particularly noticeable recently by trying to arouse the interest of users with various wild form factors. With the Wing, a device with a swivelling display was brought onto the market and a device with a roll-up screen, presented at the beginning of the year, was to follow soon. The manufacturer managed to get some media reports – but not a large number of buyers.
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The consequence of this can be seen in the balance sheets: Market researchers now rank the company with a market share of around one percent. This is not nearly enough to recoup the escalating development costs for wild model variants and so the deficit in the smartphone business last year added up to a whopping 750 million dollars. Such a loss-making company is probably not what an investor wants.
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