LG said on today it will close its loss-making mobile phone business worldwide as the once pioneer brand looks to concentrate its resources in “growth areas” such as electric vehicle components, IoT, robotics, AI, B2B solutions, & platforms and services.
The South Korean firm has said that 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, which maintained No. 3 spot in the smartphone market in the U.S. for a long time, said it will continue to sell the remaining inventory of handsets, and will provide software support for existing lineup of smartphones for a fixed duration of time that would vary by market.
The company said the status of its employees of phone business will be determined at the localized level. In January, reports emerged that said LG was looking to sell its smartphone unit. In the same month, the company said it would launch a rollable phone this year. But it appears all the efforts to keep the business alive has failed.
“Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related tech such as 6G to help further strengthen competitiveness in other core 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,” the company said in a statement.
The poor performance of LG’s smartphone business has been public knowledge. Like countless other Android smartphone vendors, LG has struggled to turn things around and remain competitive with its offerings.
LG focused on mid-range and high-end smartphones, two segments of the market that have become increasingly competitive in the past decade due to the rise of Chinese phone makers such as Huawei, Xiaomi, OnePlus, Oppo and Vivo that are launching better value-for-money models every few months. Rival, HTC has also been struggling too.
Several phone makers 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.