LG Exits Mobile Phone Business
LG confirmed speculation it is to close its mobile phone business. The decision comes after suffering years of declining market share and huge competition.
The company noted in a statement that its decision will enable it to focus resources on its other technology businesses such as electric vehicle components, connected devices, smart homes, robotics, AI and business-to-business solutions, as well as platforms and services. LG also cited 6G as an area of focus.
Its mobile phone unit is expected to close by 31 July, although customers will continue to be supported with service and software updates. LG’s news will come as little surprise. Rumours of a market exit have been circulating for months, and reports suggest the company had little interest from prospective buyers. The unit’s global market share was likely a major obstacle to securing an attractive price. Strategy Analytics data showed it held only a 2 percent share of the smartphone market in 2020 and ranked as the ninth largest vendor.
News of potentially abandoning the segment first emerged in January, only a week after the company talked-up a rollable smartphone display, the latest attempt by the manufacturer to differentiate its high-end offer with alternative form factors. Despite attempts to revive its fortunes through regular launches of devices at a range of price points and devising flagships with USPs, the smartphone unit was regularly cited as a blot on the electronic giant’s otherwise positive financial results, with wide losses often reported. The unit recorded a loss of KRW248.5 billion ($221.9 million) in 4Q20. Over the last six years the unit’s losses totalled around $4.5 billion.