World

LG to Shut Down Its Smartphone Business Worldwide Due to Losses

LG Electronics has officially announced that it is shutting down its mobile division worldwide according to a decision approved by its board of directors.

LG said that it will close its loss-making mobile phone business worldwide as the brand will now focus its resources in other growth areas like connected devices, smart homes, electric vehicle components, robotics, artificial intelligence, AI and B2B (business-to-business) solutions, and platforms and services.

The move follows the company’s statement from January when it said it was reviewing the direction of its smartphone business.

LG plans to still sell the current inventory of phones. The company will also continue to provide software support and updates to its existing phones for a certain period of time which will vary by region.

LG said in a statement, “The Company will continue to make use of the mobile expertise and even further develop its technologies such as 6G to strengthen other businesses. The core technologies developed during LG’s mobile business operations will also be retained and will be applied to existing and future products of the company.”

The company said that the status of its phone business employees will be determined at the local level of a particular region. In January 2021, there were reports in the market that LG wants to sell its smartphone business. Then in the same month, the company even announced that it would launch a rollable phone. Though, all efforts by the company to keep the business stay afloat failed.

The firm has not specified the fate of its rollable phone yet or the device called LG Rainbow. In light of the latest development likely these devices will never make it to market.

LG has maintained its No. 3 spot in the US smartphone market for a very long time. Now the market is dominated by Apple, Samsung, and the growing Chinese smartphone makers.

LG’s smartphone business has been suffering consecutive losses for about 5 years now. Like other Android smartphone vendors, LG struggled to turn things around. Last year, the brand shipped 23 million phones in comparison to 256 million phones shipped by competitor Samsung, as per a research.

In better times, LG was marketed a number of mobile innovations like ultra-wide-angle cameras and was once in 2013 even the world’s third-largest smartphone manufacturer though behind Samsung and Apple.

But later on, the company’s flagship models suffered both software and hardware mishaps like slower software updates. Analysts have also criticized the company for lack of expertise in marketing their products in comparison to their Chinese competitors.

There were even reports that the company even tried to sell its mobile division to Vietnam’s Vingroup JSC and Germany’s Volkswagen AG. However, those talks fell through, forcing the company to scrap the entity.

The company is expected to wind down its smartphone business completely by July 31.

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