LG Electronics has announced the closure of the mobile division and the exit from the world of smartphones. The decision approved today by the board of directors was long overdue, but it does not cause less sensation. The closure of the business will lead LG to be the first major smartphone brand to completely withdraw from the market.
Despite having created several bold and innovative models, the company has seen its market share decrease in seven years: in the first quarter of 2013 (according to Strategy Analytics data) it was in third place, in the third quarter of 2020 it was not even among the top seven of the market (according to Counterpoint) having lost ground to Chinese producers. The company, which produces not only smartphones but a wide range of technological products, including the most profitable appliances, in 23 consecutive quarters has made losses in the smartphone sector of about 4.5 billion dollars.
“LG’s strategic decision to exit the mobile phone sector – reads the note – will allow the company to focus resources on growing areas such as components for electric vehicles, smart homes, robotics, artificial intelligence. and B2B solutions, as well as platforms and services “. LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G to help further strengthen its competitiveness in other business areas. The key technologies developed during the two decades of the mobile division will be preserved and applied to existing and future products. The gradual closure of the business is expected to be completed by 31 July, although some of the models currently in the range may still be available beyond this date.
LG will provide support and software updates to customers of existing products for a period of time that varies by region. LG will continue to leverage its expertise in the mobile device sector and develop mobility-related technologies such as 6G. to further strengthen competitiveness in other business areas “. The company is considering the possible sale of some assets following the closure of its mobile activities. LG’s chief executive Brian Kwon said a few months ago that the company plans to keep employees regardless of what happens to the mobile unit.