LG Mobile Division withdraws from business
South Korean manufacturer will be shutting LG Mobile Division has officially withdrawn itself from the smartphone manufacturing business. This news came from a Korean news outlet Yonhap.
They said in a regulatory filing that its mobile communications (MC) unit no longer will produce and sell handsets anymore. LG’s Mobile Division was facing a continuous loss since 2015, resulting in 5 trillion won (US$4.4 billion) last year.
LG Mobile Division said that they were open to all possibilities. They were even in talks with Vingroup of Vietnam and Volkswagen of Germany to sell the mobile business, but it didn’t work.
The company will no longer produce or sell handsets after 31st June but will continue to provide aftersales services.
LG has to be one of the most innovative company when it comes to smartphone manufacturing. LG Wing was one of them. It had hidden a second display behind the main one, which had a swivel mechanism. Though the LG Wing was a success, the innovation was appealing.
LG said its exit from the mobile business will lead to a decline in revenue for the company in the short term but will eventually improve its financial status and management efficiency in the longer period.Source: Yonhap
Analysts said that LG’s operating profit could go up by 1 trillion won this year if it withdraws from the loss-making mobile business.