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South Korea’s LG Electronics on Monday said the company is closing its mobile business unit after nearly six years of losses totalling $4.5 billion. The move makes it the first major smartphone brand to withdraw from the market.
LG said the mobile phone business will wind down by July 31, although inventory of some existing models may still be available post that.
“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,” the company said in a statement.
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, it added.
For existing mobile customers, LG will provide service support and software updates for a period of time, varying by region. The company noted that details related to the employment will be determined at the local level.
The announcement has put an end to speculations around the future of LG’s smartphone business after the company said earlier this year that it would evaluate smartphone business. LG’s exit would present an opportunity to Apple and Samsung to gain more customers, especially in the US where LG’s market share was 9% in December 2020, according to a Counterpoint Research.
