Home >Companies >News >LG Electronics mulls to close down mobile phone business

South Korean multinational LG Electronics is mulling to close down its mobile communication unit rather than to sell it, media reports said on Sunday citing people familiar with the matter in electronics industry.

DongA Ilbo, a Korean newspaper, said, the negotiations with Volkswagen AG of Germany and Vingroup JSC of Vietnam on possible sale of the business seemed to have failed.

Earlier in January, LG Electronics’ CEO Kwon Bong-eok had said all options were on the table for the loss-making operation.

The report said the company last month halted the development of phones with a rollable display, and had shelved a planned first-half rollout of all new smartphones.

The company may share its decision on the mobile unit business with employees next month, the report added.

In January, the LG Mobile Communications had announced full-year 2020 revenues of KRW 5.22 trillion ($4.66 billion). Fourth-quarter sales of KRW 1.39 trillion ($1.24 billion) were 4.9 % higher than the same quarter of 2019 but 9.2 % lower than the previous quarter due to shortages of 4G chipsets and sluggish sales of premium smartphones in overseas markets.

The company had announced its 2020 revenues of KRW 63.26 trillion ($56.45 billion) and record operating profit of KRW 3.20 trillion ($2.85 billion), an increase of 31.1% over 2019. The company had claimed that growth was driven primarily by higher sales of premium home appliances and OLED TVs as well as strong growth in vehicle component solutions.

Sales in the fourth quarter of KRW 18.78 trillion ($16.76 billion) grew 16.9% from the same period of 2019 and were 11% higher than the previous quarter. Despite the impact of COVID-19, the quarter’s operating profit of KRW 650.20 billion ($580.19 million) increased significantly by 539% compared to the fourth quarter of 2019.

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