LG Electronics announced on the 7th that it will acquire Alfonso, a US data analysis company, to diversify its TV business portfolio.
Alfonso is a TV advertisement/content data analysis startup headquartered in Silicon Valley, USA, and LG Electronics has invested about $80 million (about 87 billion KRW) in Alfonso this time and secured more than 50% of the stake.
This is because LG Electronics recently decided to establish a joint venture in the electric vehicle powertrain field with the world’s third-largest auto parts company’Magna International’, and is strengthening new growth engines in the hardware field. It means a lot.
Therefore, this acquisition is to expand the TV business to the service, content, and software sectors by integrating digital transformation with the existing flagship business.
In other words, LG Electronics is preparing for the future through investments such as ▲ZKW ▲’LG Magna e-Powertrain’ (tentative name) in new business areas, and established a joint corporation with Looksoft in its main business areas to strengthen the competitiveness of automotive software modules. It is accelerating the diversification of business models such as software and services/contents.
Alfonso is a TV advertisement/contents data analysis startup established in 2012. It has an independently developed artificial intelligence video analysis solution, and holds TV viewing data of 15 million households in North America.
In recognition of its high competitiveness, the company has been continuously collaborating with global leading TV manufacturers such as LG Electronics, Sharp, Toshiba, Hisense, and Skyworth, as well as a number of competitive TV solution technology companies.
Through this acquisition, LG Electronics plans to enhance its TV business portfolio, differentiate its service and content competitiveness, and secure additional growth engines in the increasingly competitive environment, led by Chinese companies.
LG Electronics is solidifying its dominance in the global premium TV market with self-luminous OLED TVs. LG Electronics’ annual TV shipments reached 30 million units as of last year. LG OLED TV occupies more than half of the total OLED TV market.
The proportion of enjoying various contents simultaneously by connecting a TV to the Internet is also constantly increasing. As of last year, smart TVs accounted for over 83% of TVs shipped worldwide, and smart TVs accounted for over 90% of LG TVs.
In such a business environment, if LG Electronics utilizes Alfonso’s advertising/content analysis capabilities, it can provide a variety of customized services and contents to customers who purchase and watch LG TV through free broadcasting service LG channels.
In particular, since this segmented analysis of customer preferences and providing customized services can ultimately lead to customer trends, LG Electronics is able to create synergy in all business areas beyond TV, as well as simply generating content revenue. This is the company’s explanation.
Alfonso can significantly expand its business area, which was centered around North America, using LG Electronics’ global network.
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LG Electronics is planning to retain the current management and employees in order to maintain the growth engine derived from Alfonso’s unique startup culture.
“We will continue to expand the service area based on customer value while upgrading our business structure based on digital transformation,” said Hyung-se Park, head of LG Electronics’ HE business division.