LG on the verge of shutting down the production of smartphones

Korean tech company LG may end up completely phasing out smartphones amid slumping demand. Negotiations on the sale of a production line of smartphones fell through and now the fate of the business will be determined in early April 2021.

LG has moved a few steps closer to shutting down its own smartphone business. According to DongA Ilbo, LG has nearly abandoned plans to sell it, according to an unnamed source in the electronics industry. Earlier it was reported that LG planned to get rid of the smartphone business at the end of January 2021 - LG CEO Kwon Bong-seok told the company's employees in an e-mail about it. However, at that time, the hope for its further development was still glowing, and the letter mentioned two options for the outcome - LG could reduce production volumes, but at the same time keep the business for itself, or sell it to someone who would offer a large amount. At that time, there was no talk of a complete curtailment.

DongA Ilbo writes that LG was indeed negotiating the sale of its mobile unit, but, as it turned out, it was not looking for buyers among its direct competitors. There were only two interested companies, and one of them has nothing to do with the mobile communications market.

The first contender for the purchase is the German concern Volkswagen AG, the direction of which is the production of cars. It includes Audi, Skoda, Porsche and a number of other popular car brands, but not the manufacturers of pocket gadgets.

The second company interested in LG's assets is Vingroup Joint Stock Company (Vingroup JSC) from Vietnam. It is a large joint stock company, founded in 1993, and is engaged in, among others, real estate, retail trade and the provision of a wide range of services.

DongA Ilbo said the decision on the fate of LG's mobile business will be announced in the next few weeks. The company may announce it in early April 2021.