[Asia Economy Reporter Seulgina Jo] LG Electronics stated during the 2021 Q1 earnings conference call held on the afternoon of the 29th that the communication patents of the MC Business Division, which is set to withdraw from the smartphone business in July, will have "core IP assets actively utilized in the development of new smart home appliances and IoT-based products."
LG Electronics explained, "The core IP assets of mobile phones are key technologies for vehicle connectivity, so they can be used in product development such as the VS (Vehicle Solutions) division," adding, "Although a new business model for patent assets has not been finalized at this point, we will communicate with the market once possibilities are reviewed and concretized."
Regarding questions about the reassignment of existing MC Business Division personnel and the resulting cost burden, LG Electronics responded, "It is difficult to estimate exact costs at this point," and "It will be finalized according to the scale of personnel reassignment by division, but the scale of reassignment has not yet been completed."
Furthermore, LG Electronics stated, "The principle is to prioritize the individual members' wishes for transfer, and reassignment is currently underway to maintain employment with the goal of securing the group's future value," adding, "It is not at a level that burdens profit and loss management by division."
LG Electronics plans to completely cease all business activities by the end of July and is currently establishing and implementing plans for personnel reassignment, disposal of tangible and intangible assets, compensation for business partners and suppliers, and customer after-sales service (A/S).
LG Electronics MC Business Division recorded an operating loss of 280 billion KRW in Q1. The MC Business Division's performance will no longer be reflected in operating profit from Q2 onward and will be accounted for as discontinued operation losses.
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