South Korea-based technology giant LG Electronics is now approaching a historical turning point in the television market, after withdrawing from the smartphone market. According to the latest information, LG is starting negotiations with Chinese electronics manufacturer Hisense in order to restructure or completely dispose of the television division in which it has been operating for nearly 60 years.

This development, shared by South Korea-based media outlet EBN, shows that LG senior management went to Beijing and met with Hisense officials. Although there has been no official sales confirmation from either side, this claim once again reveals that the balance in the global television market has changed completely in favor of Chinese manufacturers.

• Historical Meeting:LG Electronics senior executives are meeting with Hisense management in Beijing to discuss various subsidiary and restructuring scenarios, including the sale of its TV division.

• Chinese Competition and Declining Profit Margins:The aggressive pricing policies of Chinese brands such as TCL and Hisense trigger this radical decision by reducing LG’s profitability rates in the global market to 1-2 percent.

• Software Focused Future:Even if LG leaves the television production line completely, it plans to continue to stay in the software and advertising field by keeping the webOS operating system, which has turned into a huge ecosystem exceeding 1 trillion won annually.

The Cards Are Dealt Again in the Global TV Market

LG, one of the most established names in the television market, is on the verge of a radical transformation due to pressure on market share and profitability. The company, which changed its focus by withdrawing from the smartphone market in the past, is considering a similar strategy for its television operations. Market information shared by Omdia clearly reveals the rise of Chinese manufacturers.

Brands such as Hisense and TCL manage to catch up with Samsung and LG in worldwide shipment shares, and sometimes even surpass them. While Hisense reached 15.6 percent and TCL 14.6 percent in global shipments, LG lags behind its competitors with 9.8 percent.

Reports from the Korean market indicate that the profit margin of the Media and Entertainment Department, which carries out LG’s television operations, has been squeezed to the 1 to 2 percent band. Although the company maintains its leadership in premium categories such as OLED, it struggles with a chronically low profit structure due to heavy price competition in the general television market.

After Sony’s Attack on TCL, Is it LG’s Turn?

This transformation in the television department actually stands out as the continuation of a new trend. As you may remember, Japanese technology giant Sony also attracted attention by signing an agreement to transfer the 51 percent majority share of its television and home audio systems operations to the Chinese company TCL.

While Sony continues to remain in the market by keeping the Bravia brand and image processing technologies, it is transferring the production burden to its Chinese partner. The fact that LG is sitting at the table with Hisense shows that a similar strategic partnership or a whole brand era is on the way.

LG, which entered the sector by producing Korea’s first black-and-white television in 1966, will put an end to its nearly 60-year history of television manufacturing if it achieves this sale.

webOS and Software Power Will Remain

LG’s plan to transfer television production does not mean that the brand will completely break away from the screen. Dal sources state that the company wants to retain the webOS platform, its proprietary smart TV operating system. webOS, which is also licensed to other third-party television manufacturers, has an annual advertising and service revenue exceeding the threshold of 1 trillion won (approximately 730 million dollars).

webOS, whose annual growth rate exceeds 60 percent; It is positioned as a central software platform for monitors, automotive interior displays and smart home systems.

Therefore, LG aims to get rid of the low profit margin and high cost burden of hardware production and focus entirely on software and service-oriented high profitability. With this potential acquisition, Hisense aims to increase its global presence in the premium Small LED and OLED segment.