South Korean electronics company LG has confirmed its departure from the smartphone market. Rumours of LG’s exit from the phone business started swirling last year when the company was reportedly making significant losses in the smartphone game.
LG released the following statement concerning its new direction:
LG Electronics Inc. (LG) announced that it is closing its mobile business unit. The decision was approved by its board of directors earlier today.
LG’s 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 services.
Current LG phone inventory will continue to be available for sale. LG will provide service support and software updates for customers of existing mobile products for a period of time which will vary by region. LG will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. Details related to employment will be determined at the local level.
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 wind-down of the mobile phone business is expected to be completed by July 31, although inventory of some existing models may still be available after that.”via Engadget
On top of the losses, LG’s exit from the smartphone was also fuelled by its inability to chip away at mobile device market share. The company only commanded 1.7% of the market and even though LG was on the cutting edge when it comes to design through its Wing and rollable smartphones. The market just wasn’t receptive to its bold and innovative designs.
Even on the mid-range to entry-level devices, LG was far behind companies like Oppo, Xiaomi and Motorola. To LG’s credit, they didn’t give up without a fight. The company tried to sell off its smartphone division to Vingroup JSC from Vietnam and Germany’s Volkswagen AG but that attempt failed.
The exit, as stated in the company’s statement, is not going to mean that LG’s current line is going to disappear. Hardcore LG fans can still get their hands on LG smartphones even after the company pulls out of the market completely on July 31st.