LG Electronics announced on Monday that they’re closing their mobile business unit to focus resources on other areas, including electric vehicle, smart homes, robotics, artificial intelligence, among others.
The Seoul-based multinational electronics company says that the decision to close its mobile business was approved by its board of directors.
The company will continue to support existing smartphones and provide software updates for an unspecified time, varying by region.
LG says its mobile business will completely shut down by July 31, but some existing models might still be available.
“LG’s strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas. LG will work collaboratively with suppliers and business partners throughout the closure of the mobile phone business. Details related to employment will be determined at the local level,” LG said in a statement.
In addition to AI, robotics, EV and smart homes, LG will also invest its resources into connected devices, b2b solutions, platforms and services.
While LG is shutting down its mobile unit, the company will still be developing mobile-related technologies such as 6G.
“Core technologies developed during the two decades of LG’s mobile business operations will also be retained and applied to existing and future products.”
Why is LG shutting down its mobile unit?
Although LG is one of the older mobile phone manufacturers, they haven’t been able to keep up with the competition, especially from their South Korean counterparts — Samsung — and the several Chinese smartphone manufacturers who entered the market in the past decade.
While the company was one of the top three mobile handset sellers worldwide in 2009 and successfully switched to Android in 2013 with their G-series smartphones, LG’s mobile phone sales have taken a hit over the past six years, with the company registering their highest mobile shipment worldwide in a quarter in Q4 2014 at 20 million units. Since then, the number of mobile phone units sold has shrunk increasingly.
LG global smartphone market share has also continued to decline steeply YoY. Its 4% market share in Q2 2017 decreased to nearly 1.5% in Q3 2020. The company’s newer ventures in the smartphone market, including the folding LG Wing 5G, also failed to pick up steam, and it only seems like a sound business decision to shut its mobile unit.