Original title: Old tycoons fall down one after another and do nothing with mobile phones
Source: Beijing Business Daily
In the morning of April 5, LG Electronics officially announced the closure of its mobile phone business after a series of efforts to find buyers and negotiate sales. History is always strikingly similar. Motorola, Nokia and other mobile phone tycoons keep going... However, missing smart phones is missing this era. As the common memory of the "post-80s" and "post-90s" generation, although the glory of the past is no longer there, the leaders are still thriving in communication and other fields with their deep "family background".
LG mobile phone curtain call
"We are open to all possibilities." A year ago, LG Electronics CEO Quan Bangxi was full of confidence in the sale of mobile phone business.
After all, he was once famous for a while, and it is inevitable that he will not wait for the price. In 2020, Google、Facebook、 Many giants, such as Volkswagen of Germany, queued up to talk about receiving offers, but why did they fail in their calculations?
The sale was not successful, which was due to the high price and poor goods. Among a large number of buyers, Vingroup, Vietnam's largest listed company, stood out in its offer; Moreover, Vingroup is very interested in LG's mobile phone production lines in Vietnam and Brazil: at the end of last year, Vingroup launched its first smart phone.
It seems a win-win deal, but for LG, these are not enough. South Korean media reported that "the price offered by Vingrop is too low, so low that LG is unwilling to carry out the next round of negotiations". LG "would rather not sell the production lines in Vietnam and Brazil and use them as household appliances".
As for the giants, the calculation is more accurate - they say they want to buy businesses with LG patents, but LG is unwilling to sell such businesses.
LG is certainly reluctant to sell its patent business. Looking around, those who once dominated the mobile phone industry are now fading. How many do not live by collecting patent fees? Patent is the lifeblood of technology enterprises.
What's more, although LG mobile phones have lost money year after year, they still have profitable businesses such as home appliances and digital products, and LG has failed to do so after all. LG Mobile's losses began in 2015. After 23 consecutive quarters of losses, so far, LG Mobile's total losses have been nearly 4.5 billion dollars.
On the one hand, what buyers really care about is the gold content of LG mobile phone. LG Electronics, one of the top three mobile phone manufacturers in the world, has already been heavily slapped on the beach by the waves. As of this year, LG's share of the global market is only about 1%.
"The key factor is that the market share of LG's electronic smartphone business is too small, and buyers are unlikely to buy such a brand at a high price." Zhang Xiaorong, president of the Deep Science and Technology Research Institute, said analytically.
But obviously, LG is not willing to destroy it. LG said that the completion of the mobile phone business is expected to be completed before July 31, and it will continue to sell the existing inventory, but no longer produce mobile phones. At present, the 4000 employees of LG's mobile phone business department will be transferred to the company's home appliance department and battery department next week.
Since LG withdrew from the Chinese market three years ago, there is no relevant person in charge of LG Mobile in China. The reporter of Beijing Business Daily tried to dial the phone number of LG Mobile Technology Service Center found on the Internet, but the displayed number was empty.
Left behind bosses
In today's market, LG mobile phones are hard to find. Mobile phones all look the same: touch screen, straight board, side keys.
Back in the '00s, the LG ice-cream clamshell mobile phone that my little sister was interested in, the Nokia slide N95 dedicated to Cool Cap, and the Motorola folding mobile phone that the big guys must have... That was the age of LG, and also the age when mobile phone manufacturers flourished.
How did "LGs" get to this point? Yoma Ollila, former CEO of Nokia, said helplessly at the last press conference before the mobile phone business was sold to Microsoft: "We didn't do anything wrong, but somehow we lost."
In fact, there are not a few big and small brands that have failed in the mobile phone market in recent years. In addition to LG Electronics, there are BlackBerry, Nokia, Hammer, HTC, etc.
Compared with LG, Nokia has a more brilliant past. At its peak, Nokia dominated more than half of the global mobile phone market - 8 out of every 10 mobile phone users used Nokia phones. Even Nokia has supported the development of the whole country with its own strength. From 1998 to 2007, 25% of Finland's economic growth came from Nokia.
However, when we missed the smart phone, Cheanette chose Symbian... Nokia chose the wrong fork in every decisive direction of the mobile phone market.
On September 2, 2013, Nokia sold its mobile phone business to Microsoft at a price of 7.3 billion US dollars, only 1/16 of its original maximum market value. At that time, Nokia's share price was less than 2 euros, its market value shrank by more than 90%, and its market share fell to 4%. Investors called it a junk stock one after another.
A generation of mobile phone overlords came to an end. However, the cycle of history is always on, and the story of Nokia's predecessor Motorola is no different.
In 1973, Motorola took the lead in developing the world's first mobile phone, also known as the "Big Brother" mobile phone. Since then, Motorola mobile phones of various styles and models have come out one after another. After 2009, when Nokia and other brands rose, Motorola began to fall behind. On August 15, 2011, Motorola Mobile was acquired by Google at a price of 12.5 billion US dollars after two years of hard work. In January 2014, Lenovo Group acquired Motorola's mobile phone business from Google for $2.9 billion.
Xu Yiqiang, an industry observer, pointed out that the main reason for this situation is that a large number of enterprises will fall behind step by step if they can't keep up with the fast technology update and iteration and the high threshold of competition. "It can be said that as early as three or four years ago, the mobile phone industry had entered the giant competition channel led by oligarchy. A large number of small and medium-sized enterprises and enterprises with diversified layout fell into the quagmire of survival after lacking sufficient investment and rapid follow-up."
Patent renewal
When mobile phones no longer focus on talking, the era that once pursued that mobile phones could not be broken, crushed and smashed has become history.
"Mobile phones have not been the focus of LG Electronics in recent years. It has been focusing on OLED display as the core, and through the vertical integration of the industrial chain layout, it continues to cultivate in the fields of television electronics, household appliances and other fields. At the same time, it also hopes to promote the layout of smart houses and the development of electronic business." Xu Yiqiang pointed out. However, on the whole, LG's progress in the Chinese market is not smooth. Its home appliance industry in China has basically withdrawn from the competition for the mainstream market more than a decade ago, and has instead expanded its high-end market segment with the brand of original import. This should be the result of LG's thinking for many years, that is, to concentrate its advantageous resources in the distribution of market segments and categories.
With regard to future planning, LG Electronics said in a statement issued on April 5 that the decision to stop the mobile phone business will "focus the company's resources on growth areas, such as electric vehicle parts, networking devices, smart homes robot Services and platforms for technology, artificial intelligence and to B solutions ".
Maybe the mobile phone products of the big guys are no longer favored by this era, but as once technology giants, they still hold the patents and technologies like the lifeline.
Until now, Apple, Samsung and other mobile phone manufacturers have to pay a lot of patent fees every year. In 2017, for example, Apple paid up to $2 billion in patent fees to Nokia. Up to now, Nokia has the second largest patent application in the world with about 10.5% of the 5G technology field.
However, there is no denying that Nokia, which has fallen from the altar, will never return. In 2020, Nokia laid off 6000 employees and announced that it would lay off 5000 to 10000 employees in the next two years to reduce costs and increase R&D investment in 5G and other fields. Beijing Business Daily contacted Nokia for an interview, but no reply has been received as of press release.
The predecessor Motorola also said when claiming patent licensing fees from Apple: "Apple must take 2.25% of its income as Motorola's patent licensing fees."
According to public data, Motorola's main business currently includes intercom system, public security network, video analysis software, etc. Although Motorola has withdrawn from the mobile phone industry, it still has a superior position in the private network industry.
Ge Qi, a part-time professor at the School of Economics and Management of Beijing University of Posts and Telecommunications, pointed out that LG, whose ambition is not mobile phones, would not be a problem if it sold its mobile phone business. In fact, the growth point of LG has always been household appliances. In the fourth quarter of 2020, LG's household appliance business earned US $4.94 billion, up 20% year on year.
When LG exited China earlier, it sold LG Twin Towers, a Chinese headquarters building located at Jianguomenwai Street, Chaoyang District, to a wholly-owned subsidiary of Singapore Government Investment Corporation at a price of about 8.046 billion yuan. This business helped LG make a net profit of nearly 5 billion yuan.
Beijing Business Daily reporter Shi Feiyue Chang Lei
Massive information, accurate interpretation, all in Sina Finance APP
Editor in charge: Qi Qiqi
