LG Electronics revealed that it would close its mobile business unit this year. Effective July 31, the company will no longer manufacture any of its current mobile phone models, nor will it create new ones in the future.
In a press release, LG said that its strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and service.
The company added that for now, it will provide service support and software updates for customers of its existing mobile products for a period of time; this will also vary by region.
“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen competitiveness in other business areas. Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products,” the company said.
Regarding employment, LG added that those details “will be determined at the local level.”
News of LG possibly leaving the mobile business came around January. Over the last five years, the company reported a loss of $4.5 billion as it struggled to compete with rivals. The Korea Herald reported that LG CEO Kwon Bong-seok sent an internal memo to staff members regarding a “change in direction.”
In an earlier statement, an LG representative also said: “Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice.”
LG’s Moves in the Mobile Industry
Currently, LG is the third largest smartphone brand after Apple and Samsung; in 2020, the company made up 11 percent of all smartphone sales, according to Counterpoint Research.
In the 2010s, the company came out with the G2 and G3, which proved successful. However, in recent years, LG had to compete with the likes of Samsung’s Galaxy line as both run on Google’s Android system, so its latest Wing and Velvet models did not perform as well. In addition, LG also had competition surrounding its cheaper models when it came to Chinese companies like Xiaomi, Huawei and Oppo.
At LG’s CES press conference this year, the company revealed its newest model: a rollable phone with a “unique resizable screen” that can transform itself from phone to tablet. LG planned to start selling the phone later this year, but after this week’s news, it will most likely remain unreleased.