LG Electronics Inc. (LG) is shutting its mobile business unit to focus on other sectors, the company announced in a release on Monday. Despite once being the third-largest manufacturer globally, the company decided to exit the sector after losing around $4.5 billion in the last couple of years.
In its statement, LG said it was exiting the “incredibly competitive” smartphone sector “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.” In India, the company’s market share has dwindled to 0.30% in 2020.
It plans to wind down operations by the end of July, while unsold inventory will still be available for sale.
LG recently showcased exciting and innovative products like the foldable LG Wing and the LG Rollable. It also previously partnered with Google to manufacturer the iconic smartphones in the Nexus lineup as well as the Google Pixel 2 XL. While the company had earlier stated that they would launch the LG Rollable sometime this year, those plans are probably shelved now.
Rumours of LG’s closure have been going on for months. “Since the competition in the global market for mobile devices is getting fiercer, it is about time for LG to make a cold judgment and the best choice,” an LG official said in a statement to The Korea Herald back in January. Around 60% of the employees in this division will be moved to other units, the statement added. According to earlier reports, Google, Facebook, Volkwagen, and Vietnam’s Bin Group were potential buyers but these talks didn’t make much headway.
LG will continue to use its mobile technology expertise to develop other related technologies like 6G and strengthen its position in those areas. It will also retain core technologies it has developed over the years and apply them to future products, it said.