LG may close its mobile business due to its unprofitability 

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South Korean electronics giant LG contemplates shutting down its mobile business entirely. The company hinted in January that it wanted to sell this business, but it couldn’t procure serious buyers thus far.

LG is currently an iPhone supply chain member, and it was a popular smartphone producer years ago. In fact, LG was the third-largest company in this sector worldwide at one point.

However, the mobile business has been failing to be profitable to the company for several years now. So, LG decided to move on. In January, the company declared that it was open to all possibilities for the smartphone branch’s future, even scaling it back or selling it on.

It must act one way or another or risk suffering more losses. The company has already lost almost 5 trillion won ($4.4 billion) in 2020 due to operating expenses. According to the Korea Herald, it has been unprofitable since 2015.

Even though LG gave the green light to a potential buyer for acquiring its business, there has been little progress on that front.

An anonymous mobile industry official noted that the company reportedly had talks with others over the sale of the unit. But it’s clear that there was not much progress in their negotiations. It looks like selling an entire mobile business, or even the partial sale of the unit is difficult at this moment.

According to rumors, LG had been negotiating with Volkswagen and Vietnam’s Vingroup for a potential sale, but each attempt was fruitless thus far. 

What course will LG take after failing to sell its smartphone business?

The company has spent two months restructuring. However, analysts believe that LG will likely close its mobile unit entirely. Still, it has taken measures to ensure that employees won’t lose their jobs. LG declared that people working in the smartphone branch would be safeguarded and remain employed. Most likely, LG will move those workers over to other business areas, including its vehicle component solutions division.

It’s hard to say at the outset how LG’s decision will affect its relationship with Apple if the company decides to shut the smartphone business. Currently, LG is a major supplier for Apple’s iPhone and iPad.

Furthermore, the company is also a supplier of camera modules for iPhones. According to reports, it has been working on a folded camera structure for iPhone’s new generation models.

The rumors claim that LG Display has been tapped to provide mini LED displays for an iPad Pro refresh, along with a possible flexible screen for the iPhone Fold.

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