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LG decided to end its smartphone production a few years ago due to intense competition. However, the company has found a way to continue generating revenue from its past efforts – patent licensing deals.
In 2022, LG signed an agreement with Apple to license part of its mobile patent portfolio. This provided ongoing revenue even after the company exited handset manufacturing. More recently, LG sold 48 patents to Chinese technology manufacturer Oppo in another deal.
LG sells its mobile patent portfolio to Oppo
According to The Elec, LG’s sale of 48 patents to Oppo included technologies essential to modern mobile devices. Specifically, 34 of the patents are related to codecs – the software needed to compress digital video and audio into popular formats such as MP4 and AAC. The remaining 14 patents in this category are still pending with the USPTO.
LG retained a large portfolio of over 24,000 patents spanning technologies like 4G, 5G, Wi-Fi, and other core smartphone capabilities. Since the company now relies heavily on Samsung and Apple for component supply, directly challenging their patents was not a viable option. This made Oppo an attractive partner. Meanwhile, Oppo is expanding globally and it wants to strengthen its own patent portfolio.
The financial terms of the deal between Oppo and LG were not disclosed. However, it is believed that the Chinese company paid a premium for the LG patents, recognizing their strategic importance. The deal provides both immediate funds for LG during its transition away from phones. For Oppo, it strengthens its capabilities in streaming technologies.
LG Mobile suffered an operating loss from 2015 until its closure
LG Mobile just could not generate a profit during its last six years of operation. The company tried to change that for a long time, but it did not succeed in the attempt. It released quite a few interesting smartphones over the years, like the LG Wing, for example.
The company was also planning to release another futuristic phone soon, its rollable smartphone. That phone will never see the light of day, though, it seems, which is quite unfortunate.