Seoul, South Korea
LG Electronics, at the time one of the largest manufacturers of mobile phones, has announced that it is no longer manufacturing these devices in the face of the growing competitiveness of the sector and after this branch of business has generated a deficit in the last five years.
The South Korean company made public the decision, approved this Monday by its board of directors, through a communication to the South Korean stock exchange regulator.
In a subsequent statement sent to the media, the company explained that it is leaving the “incredibly competitive mobile phone sector” to focus its resources on areas where it sees growth potential as components for electric vehicles, technology 6G, robotics, home automation or artificial intelligence.
The company has also indicated that its currently available inventory will continue to be on sale and that “LG will provide support in terms of service and software updates for customers of existing mobile products over a period of time that will vary by region.”
LG predicts “that the liquidation of the mobile phone business will be completed by July 31, still inventories of some existing models are still available after that date.”
Some well-known LG phones:
“LG will work together with vendors and partners throughout the process of closing our mobile phone business. Details related to the templates will be determined locally,” it added in the statement.
Looking to the future, the Seoul-based company vowed to continue making use of “core technologies developed during the two decades of mobile business operations” to apply them to “existing and future products.”
The decision comes after the company pointed out in its latest earnings presentation in January that the future of this division, in red numbers since the second quarter of 2015 and with accumulated losses worth about 5 trillion won (about $ 4,434,000), was open to “any possibility.”
LG, which at the beginning of the last decade became the world’s third only mobile phone manufacturer behind Samsung i Apple, it currently ranks ninth, with just a 2% global market share, according to consulting firm Counterpoint Research.