After ending its cell phone business in 2021, LG Electronics has found a lucrative revenue stream through patent licensing. The company received substantial payments from Apple and other undisclosed companies in 2022. In a move to reward its employees for their contributions, LG has been distributing a portion of these earnings, with some individuals receiving over $1 million each.
LG’s Lucrative Patent Licensing Deals
In 2022, LG was paid licensing fees for patents related to its former mobile division. While the company sold its phone business, it continued to benefit from its intellectual property portfolio. Among its top paying clients, Apple stands out, having paid LG more than half a billion dollars. This substantial payment has now trickled down to LG employees, who have shared in the windfall, according to a report by The Elec.
Also read: Top 10 US shows to watch on OTT: From Bridgerton, Doctor Who to The Agency and more
The practice of rewarding employees with such large sums appears to align with South Korea’s broader strategy of promoting innovation within its corporate sector. The government encourages companies to increase patent filings by providing incentives, a policy that seems to have paid off for LG. The company’s move from manufacturing phones to licensing patents reflects a shift in the tech industry, where intellectual property has become a key asset.
From Phones to Patents
While LG’s phones never reached the same market dominance as rivals like Apple or Samsung, the company was able to maintain a strong presence in the Android market, particularly in the US. However, after struggling to translate innovation into sales, LG exited the competitive phone market. It then focused on monetizing its patents, primarily selling them to Chinese firms like Vivo. These companies, in need of patents to avoid legal battles, purchased LG’s intellectual property to bolster their own portfolios.
Also read: WhatsApp to soon discontinue support for these iPhones models: Check if yours in this list
The patent licensing model has proven to be a lucrative business for LG, and its employees have been the beneficiaries of this success. In a time when the mobile phone industry continues to evolve, LG’s strategy of focusing on patents has provided a steady income, rewarding its workforce in the process.
