LG Electronics is likely to shut down the loss-making smartphone business unit as the South Korean tech giant is yet to find a buyer.
LG, best known for its home appliance products, is expected to reveal its decision on the mobile phone business unit next month after a board meeting, Yonhap news agency reported.
LG was the world’s ninth-largest smartphone vendor with a market share of 2 percent after shipping 24.7 million smartphones last year, down 13 percent from a year earlier, according to market researcher Counterpoint Research.
In January, LG announced its mobile communications division is open to “all possibilities” for its future operations after years of poor performance.
LG’s mobile business has been in the red since the second quarter of 2015. Its accumulated operating losses reached nearly 5 trillion won or $4.4 billion last year.
Analysts have predicted that LG will either shut down or sell its mobile business, or at least scale it back.
LG held talks with others over the sale of the unit but apparently there was not much progress in their negotiations. It seems that selling its entire mobile business appears to be difficult at this moment, as is the partial sale of the unit.
LG reportedly was in negotiations with Vingroup of Vietnam and Volkswagen of Germany but could not make notable progress, according to industry observers.
With LG’s mobile business restructuring plan running in place for two months, industry trackers are now speculating that the company is leaning more toward the option of closing the mobile unit.
With its next smartphone development projects, such as Rainbow and Rollable, reportedly ceased at this point, they predicted that LG may be looking for ways to utilize its existing mobile business workforce. LG previously said those in the mobile unit will keep their jobs.
Industry observers said workers at the smartphone business are likely to be shifted to other units in the company, such as the vehicle component solutions division, where LG is trying to beef up its size for future growth.
The company previously said it is looking for ways to internalize and use its core mobile technology to create synergy with its other businesses.