LG has announced that it will close its loss-making mobile phone business worldwide as the once pioneer brand looks to redirect its energy on “growth areas” such as electric vehicle components, connected devices, smart homes, robotics, AI and B2B solutions, and platforms and services.
According to a press statement, LG, based in South Korea, said its board of directors approved the decision today. The unsurprising move follows the company’s statement from January when it said it was reviewing the direction of its smartphone business.
LG said it would continue to sell handsets until the inventory lasts, and will provide software support for existing line-up of smartphones for a certain period of time that would vary by region.
The fate of the company’s phone business will be determined at the local level.
Reports had emerged as far back as January, suggesting that LG was looking to sell its smartphone business.
Later that month, LG said it would launch a rollable phone this year. With the latest information, the company may have given up efforts to save the phone business.
“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,” LG said in the statement.
The poor financial performance of LG’s smartphone business has been public information for several years. Like countless other Android smartphone vendors, LG has struggled to turn things around.
LG focused on mid-range and high-end smartphones, two segments of the market that have become increasingly competitive in the past decade thanks to the rise of Chinese phonemakers such as Huawei, Xiaomi, OnePlus, Oppo and Vivo that are launching better value-for-money models every few months. (Once a rival, HTC has been struggling, too.)
Several phonemakers today rely heavily on software services such as mobile payments to make money. While LG launched a mobile payments service in 2017, two years after Samsung launched Samsung Pay, LG’s portfolio of services remained thin throughout the years.
