LG Electronics has announced that it is exiting its mobile phone business, a strategic decision approved by its board earlier. The company will now focus on growth areas like electric vehicle components, smart homes, robotics, artificial intelligence, platforms, and smart devices.
“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…” the company said in a statement.
The company will wind down the mobile phone business by July 31. However, its current mobile inventory will still be available for sale. LG will also offer support services and software updates for its mobile devices for “a period of time which will vary by region.”
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Mobile, LG’s Lossmaking Machine
LG’s exit from the mobile business was not an unexpected decision following the continuous streak of losses. Losses from the division for the past five years total to approximately $4.5 billion, as the South Korean giant continues to face fierce competition from Samsung, Huawei, Xiaomi and Vivo. In 2020 alone, the mobile division recorded losses of $750.63 million. In January, the company announced that it is considering tough measures for the division, including a sale.
“Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice. The company is considering all possible measures, including sale, withdrawal and downsizing of the smartphone business,” The Korea Herald quotes a company statement.
Moving forward, the company will use its mobile expertise to develop mobile-related tech like 6G to strengthen its other business areas.