The reports from its native Korea were correct, LG is closing its mobile phone business. With losses continuing to rise and billions of dollars apparently wasted on peculiar devices, the electronics giant officially threw in the towel in its tough phone division. In a statement, the company said, “Moving forward, LG will continue to leverage its mobile experience and develop technologies related to mobility, such as 6G to help further strengthen competitiveness in other business areas.”
For now, LG said that its current stock of phones remains available for sale and that existing devices will continue to receive after-sales support and software updates “for a period of time that varies by region.” The company expects to complete the liquidation of its mobile business by the end of July, although it notes that some LG phones may continue to be sold after that date.
Despite its CEO’s promise to change his fortune by 2021, LG’s Velvet and Wing devices have failed to gain traction with the public. The attraction of dual-screen phones (and the promise of folding screens) was clearly not enough to drive consumers away from the dominant companies Apple and Samsung. While the litany of affordable flagships from companies like OnePlus and Xiaomi has continued to tear apart what remains of its market share.
In December, the newsroom was on the wall for the Korean electronics giant. With its share of the global phone market of just 1.7 percent, LG announced that it would outsource the design of more of its low and mid-range handsets to third parties. A few months earlier, he had tried to break the arena of cheap 5G phones with the $ 400 K92.
“The departure of the LG brand from the mobile space can be disappointing for some, but we are in an industry where articulating and doing what is in the best interests of employees and shareholders is also extremely important,” said Ken Hong, head of global corporate communications at LG, to Engadget. “As other beloved phone brands have demonstrated before us, it is a numbers game, not a popularity contest.”
Clearly, LG was not ready to give up its smartphone ambitions without a fight. Last month, Korean newspaper Dong-A Ilbo he reported that he was even in negotiations to sell the struggling business to Volkswagen AG in Germany and Vingroup JSC in Vietnam, but the discussions ended up failing. According to Nikkei Asia, LG’s inability to expand its smartphone business has been influenced, at least in part, by global semiconductor storage – unlike its domestic rival Samsung, LG does not produce its own smartphone chipsets and limited supply means that company has struggled to ensure an adequate supply of silicon for future mobile devices.
LG’s full statement can be found below:
“LG Electronics Inc. (LG) announced that it is closing its mobile business unit. The decision was approved by its board of directors earlier today.
LG’s strategic decision to leave the incredibly competitive mobile phone industry will allow the company to focus resources on areas of growth, such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions, as well as platforms and Services.
The current inventory of LG phones will continue to be available for sale. LG will provide service support and software updates to customers of existing mobile products for a period of time that varies by region. LG will work collaboratively with suppliers and business partners during the closing of the mobile phone business. Details related to employment will be determined at the local level.
Moving forward, LG will continue to leverage its mobile experience and develop technologies related to mobility, such as 6G to help further strengthen competitiveness in other business areas. Key technologies developed during LG’s two decades of mobile business operations will also be maintained and applied to existing and future products.
The slowdown in the mobile business is expected to be completed by July 31, although the stock of some existing models may still be available after that. “
Chris Velazco and Richard Lawler contributed to this story.