LG officially shutting down worldwide mobile phone business
It is the very first major smartphone brand to withdraw from market due to lossesEuropost
As widely rumored for the past few weeks, the South Korean electronics manufacturer LG is closing its loss-making mobile phone business. The board of directors approved officially the move on Monday, LG Electronics said in a statement released in Seoul. The shutdown of LG's mobile phone sector - the smallest of its five divisions, accounting for about 7% of revenue - is now expected to be wound down by 31 July.
"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," the statement said.
LG wants to "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 are to be thus retained and applied to existing and future products," the company added.
LG's withdrawal from the smartphone business had been on the horizon for some time. In better times, LG was early to market with a number of cell phone innovations including ultra-wide angle cameras and was once in 2013 the world's third-largest smartphone manufacturer behind Samsung and Apple.
But later, its flagship models suffered from both software and hardware mishaps which combined with slower software updates saw the brand steadily slip in favour. Analysts have also criticised the company for lack of expertise in marketing compared to Chinese rivals.
Currently, its global share is only about 2 %. It shipped 23 million phones last year which compares with 256 million for Samsung, according to research provider Counterpoint.