LG has confirmed it is exiting the global mobile phone business.
The Korean company announced the news on Monday, April 5, local time, saying that leaving the “incredibly competitive” mobile phone sector will enable it to focus on 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 wind down of its mobile phone business is likely to be completed by July 31, although the company said that some of its existing phone models will still be available while stocks last.
It added that customers of its mobile products will continue to receive service support and software updates “for a period of time which will vary by region.” U.S.-based customers can refer to an FAQ page posted by LG with everything you need to know about product support and other related issues moving forward.
News of LG’s departure from the mobile phone market had been expected, though it wasn’t clear until now if it would shutter the business or sell it. The company has found the sector hard going for years, with a Korea Herald report in January suggesting LG’s mobile unit had lost around $ 4.5 billion since 2016. In addition, as of 2020, LG’s smartphone business had posted operating losses for 23 consecutive quarters going back to 2015, and toward the end of 2020 its global market share for smartphones was a mere 1.91%, according to data from Counterpoint Research.
Commentators have attributed LG’s smartphone struggles to a slew of issues, including a lack of meaningful innovation, lackluster camera tech, a patchy history with hardware faults, software updates inferior to its competitors, and difficulties in securing stable chip supplies.
Its more recent smartphone launches, the LG Wing featuring a unique swivel screen, and the flagship LG Velvet, scored largely warm reviews but ultimately failed to persuade enough shoppers to dip into their wallets.
Indeed, eclipsed by Apple and Samsung at the premium end of the market, and squeezed by Chinese phone makers in the budget segment, LG just couldn’t find its place and so will now focus on its much more successful home appliance and OLED TV businesses.
Regarding employment, earlier reports suggested that 60% of LG’s smartphone business staff will be moved to other areas within the company, with the fate of the other 40% unknown. In Monday’s statement, LG said only that “details related to employment will be determined at the local level.”