LG announces closure of smartphone business
The company now wants to focus on growth sectors such as EVs, IoT and B2B Solutions.
LG on Monday announced that it was shutting down its mobile business unit.
The decision to exit the mobile phone business will allow the company to focus on areas such as electric vehicle components, artificial intelligence, connected devices, smart homes, business-to-business solutions, LG said.
LG added it would continue to sell phones to clear its inventory. The company will also provide service support and software updates for customers for a certain period.
According to LG, the mobile phone business wind-down is likely to be completed by July 31. It added that the inventory of some of its existing models may still be available after that date.
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The formal announcement ends speculations around the fate of the company’s mobile phone business. According to reports, LG had already begun shifting some employees from the phone division to the business unit.
Earlier this year, LG had said it would evaluate its smartphone business. The company also contemplated several options, including selling the unit. Google, Facebook, Volkswagen and Vietnam’s Bean Group were all companies LG Electronics was in talks, but evidently, none of them worked out.
LG’s exit is also not surprising as its smartphone business suffered losses since the second quarter of 2015 and has continued to do so for 23 consecutive quarters. It had accumulated up to 5 trillion won ($4.4 billion) as of the fourth quarter last year. According to a Counterpoint Research report, LG’s smartphone shipments were only 6.5 million units, and its global share stood at only 2% in Q3 2020.