LG unfortunately continues to lose billions of dollars, and the rumors are true. The company confirms to withdraw from the smartphone business.
The electronics mammoth is officially retiring from the mobile division.
The company states that, “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…and 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”
LG says it’ll continue to support its products “for a period of time which will vary by region.” For now, existing phone inventory will remain on sale.
The company expects to complete the business’ closure by end of July this year. Possible layoffs has not been discussed, yet, but “details related to employment will be determined at the local level.” It also notes that some LG phones may continue to be sold after that date.
Both the Velvet and Wing units failed to become mainstream hits.
The lure of dual-screen phones clearly was not enough to trigger consumers to part ways with arch rivals, Apple and Samsung, and its long-teased rollable phone that is supposed to be launched this year will never see the light of day.
The move has been rumored since the start of this year, following the mobile division’s huge losses over the past five years. Once considered a rival to fellow South Korean manufacturer Samsung, LG’s recent high-end smartphones have struggled to compete, while its more affordable handsets have faced stiff competition from Chinese rivals OnePlus and Xiaomi.
March this year, reports emerged that the company had tried to find a buyer for its smartphone business, but the talks had stalled and it could instead shut down the division. Also, talks to sell the struggling business to Germany’s Volkswagen AG and Vietnam’s Vingroup JSC ultimately failed.
LG’s full statements
“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.”