Or LG, which will withdraw from the mobile phone market, will rely on patents to generate revenue in the future?
Editor’s note: This article is from the micro-channel public number “Three Easy Living” (ID: IT-3eLife), Author: Sany bacteria.
Since 2018, after the global mobile phone market has experienced weak growth and even stagflation, there has been a view that the concentration of the mobile phone industry will become higher and higher in the future, and the swallowing of everything by first-tier manufacturers will be the inevitable result. After three years have passed, we can now see that major manufacturers have established sub-brands, occupying “every inch of land” in the market almost without blind spots, and many brands have disappeared in this industry.
Not long ago, Meitu announced that it had repurchased the authorization of Meitu mobile phones from Xiaomi and will no longer enter the mobile phone industry. In addition to Meitu’s curtain call from the mobile phone circle, LG, a giant with a glorious history in the industry, is also leaving. According to foreign media reports recently, LG Electronics has decided not to try to sell the MC division of the smartphone business, but to withdraw completely. According to people familiar with the matter, LG Electronics has recently confirmed the complete closure of the smartphone business unit, and 4000 related employees will be transferred to the company’s home appliance department next week.
The rumors about LG not making smartphones actually started at the beginning of this year. At that time, LG’s response was, “The company is currently carefully studying all possible options, including reducing the scale of the business, selling or maintaining the status quo, etc. “. Since then, Vingroup, known as “Vietnamese Samsung”, and German Volkswagen have allegedly become potential buyers of LG’s mobile phone business, but in the end these negotiations ended in failure.
This also means that LG’s withdrawal from the mobile phone market has almost become a certainty. After all, the LG Mobile Business Division, which is responsible for the mobile phone business, has suffered losses for 23 consecutive quarters since the second quarter of 2015. As of the fourth quarter of last year, its The accumulated loss is as high as 5 trillion won (approximately 29.38 billion yuan), and this is also one of the few long-term loss-making departments under LG. Also from researchAccording to data released by CounterPoint, LG mobile phones shipped only 6.5 million units in the third quarter of 2020, and its global market share was even less than 2%.
Different from manufacturers like Samsung and Sony, for LG, there is actually no reason to get the mobile phone business. In fact, in addition to mobile phone manufacturers, Samsung, Sony, LG and other manufacturers also have an identity as a supplier in the upstream industry chain. Whether Samsung’s AMOLED panel or Sony’s IMX series COMS, they are undoubtedly famous in the industry, and LG also has Its own OLED face and TOF lens module and other leading products.
The problem is that LG’s OELD screens have caused many of Google’s Pixel series models to “turn over”, making LG Display’s mobile phone OLED panels far away from other manufacturers. As for the TOF lens, due to cost and technical routes, only Apple is still purchasing steadily.
So compared to Samsung and Sony, LG does not need to build a mobile phone to showcase its own technology, and even if it does not make a mobile phone, it has almost no impact on other businesses. And smartphones are a dual-intensive industry of capital and technology. To keep their own products from being left behind, a huge amount of investment is required. LG mobile phones have actually been working hard for many years since they withdrew from the Chinese market, and there are also LG Wings. Quite interesting products, but in the end it still failed to make LG’s mobile phone business “defeat the sky.” Therefore, in the eyes of the outside world, LG faces such a low ROI project, and it is reasonable to choose to “slay the horse with tears”.
However, even if it wants to withdraw from the mobile phone market, LG mobile phones themselves are still “thin camels than horses”. After all, production lines, technicians, and materials are real assets, so why doesn’t LG look for “acceptances” “Xia”? According to sources familiar with the matter, it is difficult for LG to reach an agreement with potential buyers on the issue of smartphone-related technology patents. The latter hopes to acquire related businesses with patents, but LG wants to retain these patents.
If this news is true, it means that the differences between LG and the potential acquirer may be on patents. In fact, patents are a very important part of the mobile phone industry, and LG, which has many years of history, is also a patent giant. According to the “State of Innovation” report released by Thomson Reuters every year, LG Electronics, like Samsung and Huawei, are among the top patent owners.
As we all know, due to patent reasons, it is difficult for domestic mobile phones to reach the US market at this stage. If you simply buy the other assets of LG mobile phones and give up the patent, it is obviously tantamount to a waste of water for the buyer. For LG, with the jewels of Nokia and Motorola ahead, the patent is undoubtedly a hen who will lay golden eggs. Just in the middle of this month, Nokia announced that it had signed a patent license agreement with Samsung, which covers Nokia’s patents in video standards, and under this agreement, Samsung will pay Nokia a royalty.
With a huge patent portfolio, companies like Nokia and Motorola can still enjoy huge revenues every year even if they don’t sell mobile phones. This must be known to LG. Of course, at the level of market economy, if the price given is high enough, the patent can also be sold. Don’t you see that Apple bought Intel’s wireless business for $1 billion before, including 17,000 wireless items. technology patent. Obviously, the core reason for the disagreement between LG and potential buyers this time may be that the price tag has not been negotiated.
As for the impact of LG’s withdrawal from the mobile phone industry on ordinary users, perhaps the biggest impact is that for some players, the “really fragrant” second-hand LG models will no longer be there. In fact, LG’s flagship models are equipped with hardware standards that are benchmarked against the Samsung Galaxy S/Note series. Therefore, as long as it is not the first time to catch up with the new, LG’s old flagship models have been in the past few years. Models can even be started at only about 1,000 yuan.
So it’s no wonder that there is news that LG will announceWhen the mobile phone business is closed, the most uncomfortable thing in the network is this type of user.
[The picture in this article comes from the Internet]