LG Smartphones see Heavy Discounts
According to local Korean press, the last model releases from LG Electronics (066570.KS) are being sold through local carriers at substantial discounts as the fate of the company’s mobile division remains in the balance. The LG Wing, released last October and one of LG’s more unusual smartphone configurations, sells for between $1,000 and $1,700 in the US, while it is said to be available in Korea for ~$360, and could see lower prices as additional subsidies are added to move inventory. LG’s Velvet smartphone, released last May, is also said to be heavily discounted, with Korea’s most aggressive carrier offering the device for free if one signs up for their premium mobile plan and qualify for subsidies. That phone originally sold for ~ $800.
As LG decides what they will do with the mobile division, which has been losing money for years, local carriers are assuming that current inventory will be the last batch of LG smartphones and are trying to move out whatever is left, but we expect that the final outcome will be the sale of LG’s manufacturing facilities, while it maintains ownership of core IP that will help its IoT and automotive businesses in the future. Rumors concerning a number of potential buyers have been circulating for months and both a ‘calming’ note to employees from senior management and comments made during recent conference calls, seem to indicate that the company still sees value in the overall mobile assets but is considering all options.
As LG decides what they will do with the mobile division, which has been losing money for years, local carriers are assuming that current inventory will be the last batch of LG smartphones and are trying to move out whatever is left, but we expect that the final outcome will be the sale of LG’s manufacturing facilities, while it maintains ownership of core IP that will help its IoT and automotive businesses in the future. Rumors concerning a number of potential buyers have been circulating for months and both a ‘calming’ note to employees from senior management and comments made during recent conference calls, seem to indicate that the company still sees value in the overall mobile assets but is considering all options.
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