LG Electronics confirms it’s exiting the smartphone business
LG Electronics has confirmed that it’s shutting down its smartphone business. The move, the company says will enable it 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 and LG says it will continue to provide service support and software updates for customers of existing mobile products for a period of time which will vary by region.
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.
Rumours about LG exiting the smartphone business have been there for several months. Of course, this follows the division’s huge losses over the past five years. Its 2020 full-year earnings report released recently revealed that the company made a loss of USD 750.63 million (Kshs. 82.5 billion) in the whole year from its LG Mobile Communications, which houses its smartphones.
The company had previously even tried finding a buyer for its smartphone business, but that talks stalled. Last year, it also announced that it's rethinking its smartphone business strategy in an attempt to cut costs. With the new strategy, LG said it would outsource both design and manufacture of low to mid-end smartphones only to slap their label afterwards.
Moving forward, the South Korean manufacturer says it 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.