LG bids farewell to the smartphone industry as they suffer huge loss

LG has announced its exit from the smartphone market. Multiple reports in the last two weeks suggested that LG will retire from the smartphone market for good, and that has indeed proven to be the case.

LG announced its mobile business’s closing in a public release, saying that it will no longer manufacture or sell new smartphones. LG’s smartphone division has been losing money since the second quarter of 2015. In the year 2020, the mobile division lost $751 million (USD).

“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,” it said in a statement.

LG’s smartphone division, which accounts for around 7% of its sales, is scheduled to be shut down by July 31.

Employees from the division will be transferred to other LG Electronics businesses and affiliates in South Korea, while decisions on jobs will be taken locally elsewhere. Customers of current mobile devices will receive service support and software upgrades for a period of time that will differ by country, LG said. According to sources familiar with the situation, talks to sell a portion of the company to Vietnam’s Vingroup fell through disputes over terms.

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